Section 87A of Income-tax Act, provide for a rebate of an amount equal to hundred per cent of such income-tax or an amount of Rs. 2000/- (Rs. 5000 from Financial Year 2016-17), whichever is less, from the amount of income-tax to an individual resident in India whose total income does not exceed five hundred thousand rupees.
A question which is coming in the mind of Taxpayers nowadays is do Rebate of income-tax under section 87A as available from FY 2013-14, also available for FY 2015-16 and subsequent years. One more question which comes to mind is amount of Rebate Available, i.e is it Rs. 2000/- or Rs. 5000/- for Financial Year 2015-16?
We have made a Chart of Amount of Rebate Available to individual resident in India whose total income does not exceed five hundred thousand rupees :-
|S. No.||Financial Year||Rebate Available|
|1||2016-17 & Subsequent Years unless withdrawn||5000/-|
Finance Act 2013 has introduced the rebate U/s. 87A and in this section it has not restricted the exemption to any particular Financial or Assessment year and section been further amended by Finance Act 2016 to Increase the benefit from Rs. 2000/- to Rs. 5000/- wef Financial Year 2016-17 .
In both the Act mentioned above Section 87A has not restricted the exemption to any particular Financial or Assessment year. So in our our view Rebate U/s. 87A is Available to Resident Individuals for A.Y. 2016-17/ FY 2015-16 , whose total income does not exceed 5 Lakh rupees in Financial Year 2015-16. Further rebate is also available for all the years succeeding to A.Y. 2016-17 on compliance of conditions unless specifically withdrawn.
Extract of Section 87A is as follows :-
Rebate of income-tax in case of certain individuals.
1. Word “five” shall be sub. for “two” by Act No. 28 of 2016 (w.e.f. 1-4-2017).
(Compiled by Taxguru Team- Republished with Amendments)
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