Income-tax rebate u/s 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 ₹ 12500 from FY2019 -20. (Previously it was ₹ 2500, which is amended in Budget 2019)
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 and further amended in Budget 2019.
This amendment will be effective from 1st April 2020.
According to the section if the individual earning more then ₹ 500000 (after all deduction), accordingly the individual is entitled to tax payment ₹ 12500.
Under section 87A the individual will get tax exemption maximum up to ₹ 12500.
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.
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.
Also Read: What is Form 15G Form 15H?
Historical Changes of Income-tax rebate under section 87A
Income-tax rebate under section 87A is the additional bonus to the tax-payers which comes to the drastic change in Budget 2019 by 500% of the increase.
Here you can understand the historical changes year by year: