Rebate under Section 87A of Income Tax Act: Section 87A

Rebate under Section 87A of Income Tax Act: Section 87A | Rebate under Section 87A of Income Tax Act | Section 87a | Relief us 87a
Section 87a of the Income Tax Act was introduced in Finance Act, 2013. The section was introduced to provide benefits to individuals whose total net income is below Rs.5,00,000 (Rs. 3,50,000 from F.Y 2017-18)
Section 87A of Income-tax Act, provide for a rebate of an amount equal to hundred percent of such income-tax or an amount of Rs. 5000/- (Rs. 2500 from Financial Year 2017-18), whichever is less, from the amount of income-tax to an individual resident in India whose total income does not exceed 3,50,000

 Rebate under Section 87A of Income Tax Act: Section 87A

The rebate under section 87a is available only to individual assessee and not to members of Hindu United Families, AOP/BOI, Firm and Company.  Also, the aggregate amount of rebate should not exceed the amount of income tax computed before the rebate on total income of the individual with which they are chargeable for that assessment year.

S. No. Financial Year Rebate
1 2017-18 2,500/-
2 2016-17 5000/-
3 2015-16 2000/-
4 2014-15 2000/-
5 2013-14 2000/-

Few Examples to understand rebate u/s 87A on Income Tax:

Total Income Tax payable before cess Rebate u/s 87A (max allowable) Tax Payable + education cess
2,75,000 1,250 1,250 0
3,00,000 2,500 2,500 0
3,25,000 3,750 2,500 1,250+37.5
 3,50,000 5,000  2,500  2,500+75

Key Points of Section 87A of the Income Tax Act, 1961:
Listed below are the key points of Section 87A of the Income Tax Act, 1961.

  • Amended section 87A is applicable from 1st April of that financial year, it is applicable to the assessment year and its subsequent assessment years
  • Maximum Rebate amount Rs. 5000 (Rs. 2500 from F.Y 2017-18)
  • Only Indian residents can avail the rebate, NRIs are not eligible for the rebate
  • Both male and female assesses are eligible for the rebate
  • Rebate benefit is not available to super senior citizens
  • This rebate is deducted from total tax before adding Education Cess (3%).

You may also refer:

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  1. Dear friends. we can thank for the rebate of sec.87-a, given by the Govt, but how can we show in the form 16 or first ofall in the Quarterly return of 24Q to be filed before 31.05.2018. As the people who are filing the return are not so familiar with this, they asked my friend to reduced the taxable income to the tune of 20000/-. He did it and filed the same. He got an intimation from the TDS dept, stating interest has to be paid for the short deduction of tds. He is going to remit the interest? where should I show the Rs.2000/- in form 24Q annextures and also in form 16…

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