SAVE RS 2000 INCOME TAX {Section 87 A }

SAVE RS 2000 INCOME TAX {Section 87 A }

 REBATE IN INCOME TAX HELP YOU SAVE INCOME TAX {Section 87 A }

Rebate of up to ` 2,000 for resident individuals having total income of up to 5

lakh [New Section 87A]

Related amendment in section: 87 

(i) In order to provide tax relief to the individual tax payers who are in the 10% tax slab,section 87A has been inserted to provide a rebate from the tax payable by an assessee,being an individual resident in India, whose total income does not exceed ` 5,00,000.

(ii) The rebate shall be equal to the amount of income-tax payable on the total income forany assessment year or an amount of ` 2,000, whichever is less.

(iii) Consequently, any individual having total income up to ` 2,20,000 will not be required to pay any tax. Further, every individual having total income above ` 2,20,000 but not exceeding ` 5,00,000 shall get a tax relief of ` 2,000. In effect, the rebate would be the tax payable or ` 2,000, whichever is less.

(iv) Consequential amendment has been made in section 87 providing that in computing theamount of income-tax on the total income of an assessee with which he is chargeable for any assessment year, rebate as computed under section 87A shall be allowed.

(v) Further, the aggregate amount of rebate under section 87A shall not exceed the amount of income-tax (as computed before allowing such rebate) on the total income of the assessee with which he is chargeable for any assessment year.

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