Rebate Under Section 87A

Rebate:

Section 87A  has been inserted in the Income tax Act, 1961, and section 87 of the said Act has also been consequentially amended.

This amendment takes effect from 1st April, 2014 and will, accordingly, apply in relation to Assessment Year 2014-2015 and subsequent assessment years.

Rebate of Rs.2000/- for Individuals having total income up to Rs.5 lakh

With a view to provide tax relief to the individual tax payers who are in lower income bracket, a tax rebate has been provided to an assessee, being an individual resident in India and having total income not exceeding five lakh rupees.

The rebate shall be equal to amount of income tax payable on the total income for any assessment year or an amount of two thousand rupees, whichever is less. Consequently any individual having income up to Rs.2,20,000 will not be required to pay any tax and every individual having total income above Rs.2,20,000/- but not exceeding Rs. 5,00,000/- shall get a tax rebate of Rs. 2000/-.