Section-87A, Rebate

What is a REBATE?

• The primary duty of the government is to safeguard its citizens. There are many helpful provisions in the Indian tax laws to reduce your tax liability.
• Section 87A of the Indian Income Tax Act is one such provision.

A refund on taxes when the liability on tax is less than the tax paid by the individual is referred to as Income Tax Rebate.

Tax Paid is MORE then actual liability to pay.

Ex – Tax Paid say ₹10,000 and actual liability is ₹8,000 = Rebate is ₹2,000

Income Tax Provision

The assessee – Individual taxpayers who are in the 5% tax slab resident in India, whose total income does not exceed ₹5,00,000.

Section 87A provides a rebate from the tax payable by an assessee-

1.  The rebate shall be equal to the amount of income-tax payable on the total income for any assessment year OR an amount of ₹12,500, whichever is less.
2. Further, the aggregate amount of rebate under section 87A shall NOT exceed the amount of income-tax (as computed before allowing such rebate) on the total income of the assessee with which he is chargeable for any assessment year.
3. Rebate under section 87A is, however, NOT available in respect of tax payable @10% on long-term capital gains tax under section 112A.

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