What is Tax Rebate Under Section 87 A
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The Government of India has not changed the basic exemption limit of Rs. 2.5 lakhs for quite a few years now. So, anyone with income exceeding this limit is liable to pay income tax. However, at the very same time, successive governments have proposed tax rebates for taxpayers up to a specific income limit. One of these is Section 87A rebate that was introduced in FY 2013-14. The current amended Section 87A with revised limits came into effect in FY 2020-21.
As per current income tax slab rates, a resident Indian with individual total income of Rs. 5 lakh or lower in a financial year can claim rebate under section 87A. The maximum rebate under Section 87A will be 100% up to Rs. 12,500 in a financial year.
So, if your tax liability is Rs. 2,500, the rebate amount will be Rs. 2,500 only. While if your tax liability for the fiscal is Rs. 10,000, Section 87A rebate will be Rs. 10,000. However, no 87A rebate will be available if your total income for the fiscal is higher than Rs. 5 lakh.
For the current financial year 2022-2023 (AY 2023-2024), if your total taxable income for the fiscal is Rs. 5 lakh or less, then you can avail the rebate benefits under section 87A.
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