Income Tax Rebate under section 87A from financial year 2013-14


Section 87 A of the Income Tax Act, 1961 was introduced in Finance Act, 2013 to give benefit to low income group of people whose net total income is less than Rs. 5,00,000/-. The rebate under this section is available to resident individuals from A.Y. 2014-15 and financial year 2013-14.
The rebate available is maximum of:

  1. 100% of tax payable on total income or
  2. Rs. 2,000/-.

This need to be claimed while filing the return as employers cannot give this benefit as it is not covered by sec.192(2A). This section employers to give relief under sec.89(1) arrear after obtaining declaration form in form 10 E. But most software companies allowed this deduction in employer’s module. Even the module given by IT dept allows this. So most probably this will be amended to include sec.87A also in the finance bill of current year giving retrospective effect.

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One thought on “Income Tax Rebate under section 87A from financial year 2013-14

  1. Sir, can a person claim deduction under 87 A under the following circumstances: Income from dividends Rs. 4.2 lakh, income from Fixed deposits and Bank interest and pension (all combined) Rs. 4 lakhs. This is for Assessment Year 2015-16. Dividends are tax free. So in effect this cannot be clubbed with regular income. Or can it ? Thanks!

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