Finance Act 2013, has introduced new section, namely Section 87A. This newly inserted section gives rebate up to maximum of Rs. 2000/- to the assesses having Net Total Income Less than Rs. 5,00,000/-(Rs. Five lacs only). The rebate under this section is available to the resident Individuals w.e.f. A.Y. 2014-15 and On-Wards Financial Year also.
As per the New Finance Budget 2015 not abolished this Section and will be continue in this Financial Year 2015-16 and Assessment Year 2016-17.
“87A An assessee, being an individual resident in India, whose total income does not exceed five Lacs rupees, shall be entitled to a deduction, from the amount of income tax (as computed before allowing the deduction under this chapter i.e. Chaper VIA) on his total income with which he is chargeable for any assessment year, of an amount equal to hundred percent of income tax or an amount of two thousand rupees, whichever is less.”
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Conditions required to be fulfilled:
· The rebate is allowed only to the individual assesses (not to HUF/Firm/AOP/BOI)
· The individual should be resident in India
· Total income should be up to or less than Rs. 5,00,000/-. Total Income here means Income under all heads of Income (Salary, House property, Business & Profession, Capital Gain and Other sources) after deducting the deduction under chapter VI i.e. deduction from 80C to 80U.
· No deduction is available to Super Senior Citizens whose age is more than 80 years.
Quantum of Rebate:
The rebate will be the lower of
· 100% of the tax payable on Total Income; or
· Rs. 2,000/-
