Section 87A: Tax Rebate For AY 2019-20 and 2020-21 - Meteorio

Section 87A: Tax Rebate For AY 2019-20 and 2020-21

| 5 years ago

section 87A

Section 87A provides an income tax rebate to a resident individual having prescribed income. This rebate is also available to senior citizens. However, for a Super SeniorSuper Senior Citizen means a person of an age of 80 years or above at any time during a financial year Citizens this deduction becomes irrelevant.

For AY 2019-20 and AY 2020-21, the maximum income tax rebate is Rs.2,500/- and Rs.12,500/- respectively.

It is provided before the calculation of Cess of 4%.

Rebate under section 87A for AY 2019-20

Conditions to be satisfied

Under the following conditions rebate is allowed:

  1. You must be Resident Individual
  2. Total income* is up to Rs.3,50,000/-

If both the above conditions are satisfied, rebate under section 87A will be available.

*Total income is explained at the bottom of this article

Maximum Rebate

Rebate shall be lower of the following:

  1. Income tax before the rebate
  2. 2,500

Therefore, the maximum rebate for AY 2019-20 is Rs.2,500/-

Example:

Total Income (AY 2019-20)Income Tax (A)Rebate (B)Cess @ 4%
on ( A-B )
Tax Payable (A-B+Cess)
2500000000
2700001000100000
300000 (Maximum income where NO tax is payable)2500250000
350000500025001002,600
350200 (No rebate)501002005210

Rebate under section 87A for AY 2020-21 

In Budget 2019:

Tax rebate has been increased to Rs.12,500/-.

Through this amendment, every resident taxpayer having total income* up to Rs. 5 lakh won’t have to pay income tax.

Conditions to be satisfied

Under the following conditions rebate is allowed:

  1. You must be Resident Individual
  2. Total income* is up to Rs.5,00,000/-

If both the above conditions are satisfied, rebate under section 87A will be available.

Maximum Rebate

Rebate shall be lower of the following:

  1. Income tax before the rebate, or
  2. 12,500/-

Therefore, the maximum rebate for AY 2020-21 is Rs.12,500/-

Example:

Total Income (AY 2020-21)Income Tax (A)Rebate (B)Cess @ 4%
on ( A-B )
Tax Payable (A-B+Cess)
2,50,0000000
3,90,0007,0007,00000
5,00,000 (Maximum income where NO tax is payable)12,50012,50000
5,01,000 (No rebate)12,700050813,208

Total Income *

Total income is the income left after chapter VI-A deduction.

Calculation of total IncomeAmount
Income from Salaryxx
Income from House Property [HP]xx
Income from Business [PGBP]xx
Capital Gainsxx
Income From Other Sourcesxx
Gross Total Incomexxx
Less:
Chapter VI-A
80C-80U(xx)
Total Income [look for this value]xxx
                                   Tax Rebate
Tax on total income
[as per slap mentioned in notes]
xx
Less:
Rebate of 87A(xx)
Tax after rebatexx

Notes

A. Income tax slab for individual for AY 2019-20 is

  1. Income up to Rs.2,50,000 – 0%
  2. Income from Rs.2,50,000 to 5,00,000 – 5%
  3. Income from Rs.5,00,000 to 10,00,000 – 20%
  4. Income more than Rs.10,00,000 – 30%

B. Income tax slab for individual for AY 2020-21 is

  1. Income up to Rs.2,50,000 – 0%
  2. Income from Rs.2,50,000 to 5,00,000 – 5%
  3. Income from Rs.5,00,000 to 10,00,000 – 20%
  4. Income more than Rs.10,00,000 – 30%

Adverts *