Sec 87A- Newly Inserted w.e.f F.A. 2013(Rebate of Rs. 2000 for resident individuals having total Income up to Rs. 5 lakh)

Available in A.Y.2014-15

Rebate of Rs. 2000 for resident individuals having total Income up to Rs. 5 lakh

With a view to provide tax relief to the Individual who are in lower income bracket, a rebate is provided for u/s 87A newly inserted by FA 2013. But to avail benefits under this section these two conditions needs to be satisfied.

Condition

1.      Tax Payer must be a resident Individual (Ordinary resident)

2.      His total income or net income or taxable income is Rs. 5 lakh or less

If the above two conditions are satisfied the individual taxpayer can claim rebate under this section from the A.Y. 2014-15 onwards.

Amount of Rebate:

            100% of Tax paid on total income or Rs. 2,000 whichever is less. This rebate is available on income tax i.e. before adding CESS.

Illustration   

A.     If a resident individual having income of Rs. 2, 20,000 he need not to pay any taxes and if total income is above Rs. 2, 20,000 but less than 5, 00,000 ,a rebate of Rs. 2,000 available to them.

B.     In case of Senior Resident individual he need to pay taxes if having Income of Rs. 2,70,000 and if total Income exceeds 2,70,000 but less than Rs.5,00,000 , a rebate of Rs. 2,000 available to them.

Note:

1.      Net taxable Income- Gross total Income less deductions u/s 80C to 80U

2.      Rebate under this section are not available in case of a non-resident individual not even the not ordinary resident

3.      Rebate under this section not available to HUF, AOP, and BOI-Resident or non-resident.

4.      Rebate under this section not available to any other tax payer other than Resident Individual

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