Durgesh Vashisth
Rebate of up to Rs. 5,000 for resident individuals having total income of up to Rs. 5,00,000 as per Sec-87A of Income Tax Act, 1961 for A.Y. 2017-18 i.e. F.Y. 2016-17.
The rebate shall be equal to the amount of income tax payable on the total income for assessment year 2017-18 or an amount of Rs. 5,000, whichever is less.
Key Point :-
- Individual resident of India,
- Whose Total Income is up to Rs. 5,00,000,
- Shall be allowed a rebate, From Income Tax,
- 100% of Income Tax or Rs.5,000, Whichever is Less.
The above points have been represented below showing the manner of Computation:-
Example 1
Compute the tax liability of X Ltd., a domestic company, assuming that the total income of X Ltd. Is Rs. 2,80,000.
Answer
| Particulars | Rs. |
| Tax on total income@30% of Rs.2,80,000 | 84,000 |
| Less: Rebate under section 87A* | ( – ) |
| 84,000 | |
| Add: Education cess@2% | 1,680 |
| Secondary and higher education cess@1% | 840 |
| Total tax liability | 86,480 |
*As per section 87A the rebate of Rs. 5,000 is allowed to residential individual.
Example 2
Compute the tax liability of Mr. X, a salaried employee (age: 45 years), assuming that the total income of Rs. 4,80,000. During the previous year ending on March 31, 2017.
Answer
| Particulars | Rs. |
| Tax on total income@10% of Rs.2,30,000
(Rs.4,80,000-2,50,000) |
23,000 |
| Less: Rebate under section 87A | (5,000) |
| 18,000 | |
| Add: Education cess@2% | 360 |
| Secondary and higher education cess@1% | 180 |
| Total tax liability | 18,540 |
*As per section 87A the rebate shall be equal to the amount of income tax payable or an amount of Rs. 5,000, whichever is less.
Example 3
Compute the tax liability of Mr. X, a salaried employee (age: 45 years), assuming that the total income of Rs. 2,60,000. During the previous year ending on March 31, 2017.
Answer
| Particulars | Rs. |
| Tax on total income@10% of Rs.10,000 | 1,000 |
| Less: Rebate under section 87A | (1,000) |
| Add: Education cess@2% | Nil |
| Secondary and higher education cess@1% | Nil |
| Total tax liability | Nil |
*As per section 87A the rebate shall be equal to the amount of income tax payable or an amount of Rs. 5,000, whichever is less.
- 10000*10% = 1000
- 5000
Rebate allowed of Rs.1000.
Example 4
Compute the tax liability of Mr. X (age: 45 years), assuming that the total income of Rs. 5,40,000. During the previous year ending on March 31, 2017.
Answer
| Particulars | Rs. |
| Tax on total income@10% of Rs.2,90,000 | 29,000 |
| Less: Rebate under section 87A | (- ) |
| 29,000 | |
| Add: Education cess@2% | 580 |
| Secondary and higher education cess@1% | 290 |
| Total tax liability | 29,870 |
No Rebate U/s. 87A is allowed as Total Income Exceeds Rs. 5,00,000/-
*As per section 87A the rebate shall be equal to the amount of income tax payable or an amount of Rs. 5,000, whichever is less.
Example 5
Compute the tax liability of Mr. X, a salaried employee (age: 45 years), assuming that his casual income of Rs. 4,80,000. During the previous year ending on March 31, 2017.
Answer
| Particulars | Rs. |
| Tax on total income@30% of Rs.4,80,000 | 1,44,000 |
| Less: Rebate under section 87A | (5,000) |
| 1,39,000 | |
| Add: Education cess@2% | 2,780 |
| Secondary and higher education cess@1% | 1,390 |
| Total tax liability | 1,43,170 |
*As per section 87A the rebate shall be equal to the amount of income tax payable or an amount of Rs. 5,000, whichever is less.
My total income as pension for 2016.2017 is Rs34300/ I am now 68 years old. How much income tax rebate under 87Afor AY2017.2018 (F.Y 2016.2017
My total taxable income after 80 c deduction of 1.5 lakhs is 448110
Can you advise my total tax lliability
Iam 55 years
Helpful information on section 87A is available here.Thank e.Thanks.
EXAMPLE NO 4 IS WRONG CALCULATION BECAUSE SLAB RATE IS
UP TO 250000 TAX IS NIL
500000 – 250000 TAX IS 10 %
1000000-500000 TAX IS 20%
ABOVE 10 LACS TAX @ 30 %
HENCE TAX LIAB OF EXAMPLE NO 4 IS
ON 250000 TAX 25000
ADD TAX ON 40000 @ 20% =8000
TOTAL TAX IS 33000+ EC 3 % ,ie 990
TOTAL TAX LIAB 33,990.00
What are the provisions of rebate of ₹2000 u/s 87A???
Do the arear of previous years calculated for relief u/s89 in form 10E includes or excludes the total taxable for rebate u/s87?
My total Salary for the FY 2016-17 is Rs 480000/-
PF:36000/-
LIC: 56688/-
PT deduction:-2500/-
then how much tax i will pay and for which head
My gross income is 538405
Deductions is 150000
What will be my tax for ass yr 2016-17
The first example has wrong education cess it’s 1680 not 1640.
Plz clear total income more than Rs.550000.00 f.y.2015-16.how get rebate 87A?
Gross Income = Annual Income – HRA+TPA+PT
Net taxable Income = Gross Income –
80C+80D+80E
If Net taxable income Rs. 5 lacs
Under 87A rebate Rs. 2000/-
MY SALARY INCOME IS 7 LAC CAN I AM ELIGIBLE TO TAKE 87A REBATE
My gross income is 701180 gpf ded.150000 home loan intrest 121790 cea 3840.shall i get this rebate of 5000?
very helpfull article, explained in leyman language
handicappet employee total income 6,11,066 gpf 1,50,000 87A rebate ?
Dear Mr. Raj Vij,
Please share the correct tax calculation.
Dear Mr. Mohit Adatiya,
You are right in Example 4, i have mentioned tax of 29,000 on Income of 540,000. However, it should be 33,000 (250000*10% + 40000*20%)
Thanking you for mentioned this mistake.
Dear veeresalingam kvs,
Your Total income is Rs.618510/- which is exceeding Rs. 5,00,000/-, therefore you are not eligible for rebate u/s 87A.
my total salary is 774208 after savings 150000+ is 618510 after income tax exemp250000 is 368510 what is my taxable income sir 87a tax rebate is applicable or not
Dear Mr. Durgesh,
In Example 4, you have mentioned tax of 29,000 on Income of 540,000. However, I believe it should be 33,000. Kindly re-check your calculations.
TAX CALCULATION IS INCORRECT
Calculation of Total Tax Liability
(In Rs.)
Particular Mr. M.D. Motwani Mr. V.K. Kataria Mr. Ankit Soni
Gross Total Income 544506.00 538942.00 453600.00
Less: Deduction (150000.00) (150000.00) 0.00
Total Income 394506.00 388942.00 453600.00
Tax on Tatal Income
0-250000
(250000 – 500000)@10% 14450.60 13894.20 20360.00
Less: Rebate u/s 87A (5000.00) (5000.00) (5000.00)
9450.60 8894.20 15360.00
Add: EC & SHEC @ 3% 283.52 266.83 460.80
Total Tax Liability 9734.00 9161.00 15821.00
Sir, My Total salary income for the FY 2016-17 will be 544506.00 (included 16292 HRA). I invested 1.5 Lacs u/s 80 C. can I get benefit of Rebate ? How many income tax for me
My gross income from pension is 538942. Saving under 80C (PPF) is 150000. Am I eligible for rebate under section 87A
if an individual (indian resident) having his income under following heads for pursuing higher education in an indian gov university:-
fellowship : Rs 378000/- pa
HRA: Rs 75600/-pa
how much is the taxable income for him for FY2016-17?
Dear Mr. A K KASHYAP,
You are eligible for rebate u/s 87a
Dear Mr. Dharmesh,
You are also eligible for rebate u/s 87a
I am a pensioner. My total pension is around 3.7 lac and interest earned on deposit around 1 lac. Am I eligible for rebate u/s 87 A.
Hi My Total salary income for the FY 2016-17 will be 5.50 (included 90,000 allowance such as HRA, Conveyance, Medical etc). I invested 1.5 Lacs u/s 80 C. can I get benefit of Rebate ?
MY TOTAL INCOME INCLUDING LAST YEARS DA ARREARS AND BONUS ARREARS IS RS 5,04,000. AM I ELIGIBLE FOR REBATE U/S 87A?
Dear Mr R.S. Yadav,
Your total income is exceeding Rs. 5,00,000/-, therefore you are not eligible for rebate u/s 87A.
Thanks & Regards
Durgesh Vashisth
Dear Mr Sachin,
As per Section 87A of Income Tax Act, 1961 Rebate of up to Rs.5000 is for resident individuals having total income of up to Rs. 5,00,000/-.
[Total Income = Gross Total Income – Deductions]
In your case, your total income is Rs.4.5L, therefore you are eligible for rebate u/s 87A.
Your Tax liability is :-
Tax on total income@10% 2.0L 20,000
(Rs.4,50,000-2,50,000)
Less: Rebate under section 87A (5,000)
15,000
Add: Education cess@2% 300
SHEC@1% 150
Total tax liability 15,450
Thanks & Regards
Durgesh Vashisth
My annual income for FY 16-17 will be 8.00 lacs. I am entitled to get 2.0 lacs deduction towards interest paid on home loan. Similarly I will be availing 1.50 lacs deduction for insurance, PF and home loan principle.
It means that my taxable income will be 4.50 lacs only.
Now my question is, whether I will be allowed to avail rebate of 5000 under section 87 A as net taxable income is 4.5 lacs. While gross taxable income is 8.00 lacs.
My salary during the F Y 2016-17 after deduction is Rs 5,40,000/- including arrear of Rs 45000/- of previous F Ys.
Am I eligible for rebate u/S 87A of Rs 5,000/- ? Or not
If I have deduct the arrear of Rs 45000/- from 540000/- net salary for current year is remaining rs 495000/-. Which is below the limit of 5 lac.
Plz suggest….
In case both husband & wife are senior citizen, I want to know whether the base for the tax rebate to be considered will be in respect of senior woman or man.
Very useful infn indeed in a crystal clear manner even for a lay man .congts.to taxguru and google
Dear Nitin Wadhawan,
As per Section 87A of Income Tax Act, 1961, Rebate of up to Rs. 5,000 is for resident individuals having total income of up to Rs. 5,00,000/-.
In example 4 the Total Income of Mr. X is exceeding Rs.5,00,000/-, there for he is not eligible for rebate u/s 87A.
Thanks & Regards
Durgesh Vashisth
9899812287
example 4 seems to be incorrect, there should be rebate of 5K, there as well.