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

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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)
250000 0 0 0 0
270000 1000 1000 0 0
300000 (Maximum income where NO tax is payable) 2500 2500 0 0
350000 5000 2500 100 2,600
350200 (No rebate) 5010 0 200 5210

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)
2,50,000 0 0 0 0
3,90,000 7,000 7,000 0 0
5,00,000 (Maximum income where NO tax is payable) 12,500 12,500 0 0
5,01,000 (No rebate) 12,700 0 508 13,208

Rebate under section 87A for AY 2017-18 

Conditions to be satisfied

Under 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 following:

  1. Income tax before the rebate
  2. 5,000

Therefore, the maximum rebate for AY 2017-18 is Rs.5,000/-

Example:

Total Income*
(AY 2017-18)
Income Tax (A) Rebate (B) Cess @ 3%
on ( A-B )
Tax Payable (A-B+Cess)
250000 0 0 0 0
270000 2000 2000 0 0
300000 (Maximum income where NO tax is payable) 5000 5000 0 0
350000 10000 5000 150 5150
500000 25000 5000 600 20600
500100 (No rebate) 25020 0 750 25770

Total Income *

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

Calculation of total Income Amount
Income from Salary xx
Income from House Property [HP] xx
Income from Business [PGBP] xx
Capital Gains xx
Income From Other Sources xx
Gross Total Income xxx
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 rebate xx

 

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 *

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