What is rebate u/s 87A of Income Tax Act?

How to calculate rebate u/s 87a? Section 87A provides tax rebate to the individual taxpayers if their total income is less than Rs 5 Lakhs after claiming deductions. Hence , firstly taxable income after deductions is to be determined to check the eligibility of the rebate.

What is rebate under section 87A and who can claim it?

​​​​​​​​​An individual who is resident in India and whose total income does not exceed Rs. 5,00,000 is entitled to claim rebate under section 87A​. Rebate under section 87A is available in the form of deduction from the tax liability. Rebate under section 87A​ will be lower of 100% of income-tax liability or Rs.

How is US 87A rebate calculated?

To calculate rebate under section 87A, calculate your gross income and subtract the available deductions under Sections 80C to 80U. Now, if your net taxable income is less than Rs. 5 lakhs, you are eligible for the rebate upto Rs 12500 on the tax payable before health and education Cess.

Who is eligible for 87A rebate?

Anybody and everybody is not entitled to avail this rebate. Though the basic exemption limit of Rs. 2.50 lakh is applicable for all Individuals and HUFs whether resident or non-resident but the rebate under Section 87A is available only to an individual and that too only if he is resident for income tax purposes.

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What is the income tax on a salary of Rs 5 lakhs per annum?

What are the different tax slabs and tax rates under the new tax regime?

Total Income per annum Tax Rates
Upto Rs. 2.5 lakh Nil
Above Rs. 2.5 lakh up to Rs. 5 lakh 5%
Above Rs. 5 lakh up to Rs. 7.50 lakh 10%
Above Rs. 7.50 lakh up to Rs. 10 lakh 15%

How is tax calculated on salary?

Income tax calculation for the Salaried



Income from salary is the sum of Basic salary + HRA + Special Allowance + Transport Allowance + any other allowance. Some components of your salary are exempt from tax, such as telephone bills reimbursement, leave travel allowance.

What is the income tax slab for AY 2020-21?

New Income Tax Slab for FY 2020-21 & AY 2021-22

Annual Income New Tax Regime Old Tax Regime
Rs.2.5 lakh – Rs.5 lakh 5%* 5%*
Rs.5 lakh – Rs.7.5 lakh 10% 20%
Rs.7.5 lakh – Rs.10 lakh 15% 20%
Rs.10 lakh – Rs.12.5 lakh 20% 30%

Is there any standard deduction for FY 2020-21?

For the FY 2019-20 & FY 2020-21 the limit of the standard deduction is Rs 50,000.



Standard Deduction Impact on Tax on Salary Income.

Particulars FY 2020-21 (Old Tax Regime) FY 2020-21 (New Tax Regime)
Less: Standard Deduction 50,000
Taxable Salary 3,00,000 3,50,000

Is 87A applicable in new tax regime?

Answer: Benefits of rebate under section 87A are same for all resident individuals of all age groups under both existing tax regime and new tax regime. This benefit is however not applicable for NRIs and HUFs. Section 87A provides a rebate of up to Rs 12,500 for income up to Rs 5,00,000 to all resident individuals.

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How is rebate calculated?

To calculate rebate under section 87A, calculate your gross income and subtract the available deductions under Sections 80C to 80U. Now, if your net taxable income is less than Rs. 5 lakhs, you are eligible for the rebate upto Rs 12500 on the tax payable before health and education Cess.

What is rebate amount?

A rebate under section 87A is one of the income tax provisions that help taxpayers reduce their income tax liability. You can claim an income tax rebate under section 87A if your total income does not exceed Rs 5 lakh in a financial year.

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