A new section 87A was introduced by Finance bill 2013 for Income Tax Deduction of Rs. 2000/- for Assessment Year 2014-15. This section was further amended by Finance Act 2017. As per the amended section 87A, this  rebate can be availed by resident individual, whose net income does not exceeds Rs 3.5 Lacs. The amount of deduction is 100% tax or Rs 2500, whichever is less .

The amended section 87A seeks to provide that an assessee, being an individual resident in India, whose total income does not exceed 3.5 lacs, shall be entitled to a deduction, from the amount of income-tax 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  Rs 2500, 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 A.y 2018-19 1and will, accordingly, apply in relation to the assessment year 2019-20 and subsequent assessment years unless withdrawn
  • Rebate is available  only to individuals
  • No rebate to Non Resident.
  • If the total tax payable is less than Rs. 2500/-, 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. 2,50,000/- to Rs. 2,75,000/-.

Section 87A Reads as:

87A. An assessee, being an individual resident in India, whose total income does not exceed [three hundred fifty thousand] rupees, shall be entitled to a deduction, from the amount of income-tax (as computed before allowing the deductions under this Chapter) 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 and five hundred] rupees, whichever is less.

Shubhi Goel

Shubhigoel1989@gmail.com

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

(Republished With Amendments)

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Category : Income Tax (28846)
Type : Articles
Tags : SECTION 87A (18)

14 Comments

  1. Anita Pritamsingh Thakur says:

    Dear Sir, my gross salary is rs.6,16,010/- and my savings is rs.1,50,000/- u/s 80 c and my home loan interest is of rs. 1,40,000/-.
    Should i get relief u/s 87 A.
    with regards

  2. 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?

  3. 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

  4. 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

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