Today we are discussing on Frequently asked question on Rebate under Section 87A , meaning and benefits of Rebate U/S. 87A .This is the new section Rebate U/S. 87A introduce by Finance Bill, 2013. Rebate under section 87A is applicable from Financial year 2013-14 and assessment year 2014-15
(I) 87A Rebate for financial year 2013-14 –
Additional tax benefits of Rs 2,000/- or 100 percent of income tax whichever is less is available to an Individual resident in India, if his total income does not exceed Rs 5, 00,000 from financial year 2013-14.
(II) Frequently asked question on Rebate under Section 87A
In which year rebate under section 87A is avaialble.
Rebate U/S. 87A introduce by Finance Bill, 2013. It is applicable from Financial year 2013-14 and assessment year 2014-15
Who can claim the benefits u/s 87 A?
An Individual resident in India whose total income doesn’t exceeds Rs. 5,00,000/- can avail this benefit. This benefit is also available for super senior citizen but they can’t take the benefit because they are exempted upto Rs. 5,00,000/-.
What is the meaning of total income u/s 87A?
Total Income means the income after deducting Deduction under Chapter VIA.
How much benefits can be claimed u/s 87A?
The Maximum benefit can be available is maximum of 100% of such income tax or Rs. 2,000/- whichever is less
The above section can be well understood with the below given example:
In this example our total tax is more than Rs. 2000/-
Assessee: Individual
A.Y. 2014-15
| Gross Total Income | Rs. 5,75,000 |
| Less: Deduction under chapter VI A | Rs. 85,000 |
| Total Income | Rs. 4,90,000 |
| Tax On Total Income | Rs. 29,000 |
| Rebate U/s. 87A(Rs. 2,000 or 100% of Tax i.e. Rs. 29,000 whichever is less) | Rs. 2,000 |
| Net Tax | Rs. 27,000 |
| Add: Edu. & Sec. Edu. Cess@3% | Rs. 810 |
| Total Tax Payable | Rs. 27,810 |
| Less: TDS Credit & Advance Tax | Rs. 20,000 |
| Net Tax Payable | Rs. 7,810, |
Now we take an another example:
In this Example our Total Tax is less than Rs. 2000/-
| Gross Total Income | Rs. 2,75,000 |
| Less: Deduction under chapter VI A | Rs. 61,000 |
| Total Income | Rs. 2,14,000 |
| Tax On Total Income | Rs. 1,400 |
| Rebate U/s. 87A(Rs. 2,000 or 100% of Tax i.e. Rs. 1,400 whichever is less) | Rs. 1,400 |
| Net Tax | Rs. Nil |
| Add: Edu. & Sec. Edu. Cess@3% | Rs. Nil |
| Total Tax Payable | Rs. Nil |
| Less: TDS Credit & Advance Tax | Rs. Nil |
| Net Tax Payable | Rs. Nil |
