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.
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.
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 87A||Net Tax Payable (₹)|
Above table indicates the income slab and tax payable.
Silent features of Income-tax rebate under section 87A
Here are some of the salient features of Income-tax rebate under section 87a:
- All individual male-female including senior citizen is entitled to avail the benefit of section 87a.
- Other than individuals, HUFs, companies, partnership form etc are not eligible under section 87A.
- Income Tax rebate u/s 87a is available for resident individual or nonresident individual.
- There is no benefit for super senior citizen above 80 years, as their income up to ₹ 500000 is already exempted from income tax department.
- 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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