Income tax rebate u/s “87 A” allowed to individual

By | 06/05/2018

Income-tax rebate under section 87A is introduced for the individual to participate and encourage the individual to fill income tax return.

Under section 87A, the individual is allowed to rebate income tax maximum up to ₹ 2500.

Rebate u/s 87A

What is Income tax rebate under section 87A? 

It is introduced in the financial bill in the year 2013, which is further amended in the year 2017.

This amendment will be effective from 1st April 2018.

Also Read: Tax relief under section 89(1) on salary arrears

According to the section if the individual earning more then ₹ 350000 accordingly the individual is entitled to tax payment ₹ 5000.

Under section 87A the individual will get tax exemption maximum up to ₹ 2500. 

87A only work for you if the individual tax liability comes out to be ₹ 5000 or less after availing all tax exemption under section 80.

The only individual will get the rebate benefit u/s 87A,  HUFs or firms, or companies will not be entitled to this section.

Note: Senior Citizens (above the age of 60 years and less than 80 years) are also entited to take benefit for a rebate under Section 87A.

Criteria u/s 87A

Below example provides a detailed view of the different segment of income groups:

Total -Taxable Income (₹)Income Tax (₹)Rebate applicable u/s 87ANet Tax Payable (₹)
30000025002500-
31000030002500500
320000350025001000
330000400025001500
340000450025002000
350000500025002500
4000007500-7500
50000012500-12500

Above table indicates the income slab and tax payable.

Also Read: Understand Tax saving options:(80C deduction Guide) Download excel sheet

 Silent features of Income-tax rebate under section 87A

Here are some of the salient features of Income-tax rebate under section 87a:

  1. All individual male-female including senior citizen is entitled to avail the benefit of section 87a.
  2. Other than individuals, HUFs, companies, partnership form etc are not eligible under section 87A.
  3. Income Tax rebate u/s 87a is available for resident individual or nonresident individual.
  4. There is no benefit for super senior citizen above 80 years, as their income up to ₹ 500000 is already exempted from income tax department.
  5. In totality income tax amount up to ₹5000 is exempted up to ₹ 2500 (for example: if the tax amount comes out to be ₹ 5000, you have to pay ₹ 2500 after better rebate of ₹ 2500 u/s 87A).

Also Read: What is Form 15G Form 15H?

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Amit Bansal
Amit Bansal
Hey, Amit Kumar Bansal, the man behind this blog. I always passionate about Taxes, Stock Market. This was one of the reasons why I have chosen the field of account. Blogging was not the coincidence it was a proper decision. The main aim of this blog is to help readers to take an informed financial decision. If you like my efforts kindly subscribe to this blog and also let your friends know about this website by sharing.

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