• Dec
  • 24
  • 2013

Section 87A – Income Tax Rebate

A new section 87A by Finance bill 2013 has been introduced for Income Tax Deduction of Rs. 2000/- for Assessment Year 2014-15.  This rebate can be availed Tax payer/Assessee under section 87A. It is necessary to read clauses 19 and 20 of the bill to make it more clear-

Clauses 19 and 20 of the Bill seek to amend section 87 and insert a new section 87A in the Income-tax Act relating to rebate of income-tax in case of certain individuals.

The proposed new section 87A seeks to provide that an assessee, being an individual resident in India, whose total income does not exceed five hundred thousand rupees, shall be entitled to a deduction, from the amount of income-tax (as computed before allowing the deductions under Chapter VIII of the Income-tax Act) on his total income with which he is chargeable for any assessment year, of an amount equal to hundred per cent of such income-tax or an amount of two thousand rupees, whichever is less.

Consequential amendments have been proposed in section 87, so as to provide reference to proposed new section 87A.

Points of consideration….

  • These amendments will take effect from 1st April, 2014 and will, accordingly, apply in relation to the assessment year 2014-15 and subsequent assessment years.
  • Rebate is available  only to individuals
  • No rebate to Non Resident.
  • If the total tax payable is less than Rs. 2000/-, rebate is restricted to “total tax payable”.
  • Rebate benefit is not applicable to a super senior citizen, since he is already fully exempted up to Rs. 5 lakh.
  • Above amendment does not mean that basic Exemption Limit has been raised from Rs. 2,00,000/- to Rs. 2,20,000/-.

Shubhi Goel

Shubhigoel1989@gmail.com

Also Read :- S. 87A Income Tax Credit/Rebate of Rs. 2,000 – FAQ


7 Responses to “Section 87A – Income Tax Rebate”

  1. Ayyanmani says:

    Pl, let me know whether 2000 rebate under sec 87A is applicable for AY 2015-2016 also

  2. Manoj Agarwal says:

    Nice Article. Anyone can also visit my article dated 02-03-2013!!!
    http://taxguru.in/income-tax/87a-income-tax-creditrebate-rs-2000-faq.html

  3. Pushkar says:

    My total taxable income is nil according to form 16.In that i have got rebate of under section 87A is 700. Now my saving account interest is 80000 so will I get remaining 1300 from this interest?

  4. Kanhaiya Chaudhary says:

    I think Sunil is saying correct. Section 87A will be applied from 01.04.2013.

  5. Mahesh Pai says:

    Sir,
    As an employer whether we can give the rebate at source or the assessee has to file his return to claim the rebate
    Regards,
    Mahesh Pai

  6. RAJAN DHAWAN says:

    A FLAT IS BOOKED IN 2012. THE VALUE IS 70 LAKHS. 50 LAKHS IS PAID BEFORE 31/5/2013 AND BALANCE AMOUNT IN DEEMBER 2013. WHAT IS THE IMPLICATION AS REGARDS DEDUCTION OF TAX IN TERMS OF LATEST TAX PROVISIONS

  7. Sunil says:

    Is this amendment under section 87A is applied from 01-04-2013 or 01-04-2014? I think it is from 01-04-2013. Please check it.

Leave a Reply

GET FREE EMAIL UPDATES