Section 87a

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Querist : Anonymous

Querist : Anonymous (Querist)

03 September 2014 I just have a doubt regarding rebate u/s 87A that why is the rebate u/s 87a deducted after gross tax but why not after charging EC & SHEC i.e. after net income tax?

@VaibhavJ

@VaibhavJ (Expert)
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03 September 2014 Hi

Applicability is other way, SC & HEC is charged on Gross tax liability.

Thanks

Querist : Anonymous

Querist : Anonymous (Querist)

03 September 2014 sir I need the reason why is it so.

@VaibhavJ

@VaibhavJ (Expert)
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03 September 2014 Section 87A states, An assessee, being an individual resident in India, whose total income does not exceed five hundred thousand rupees, shall be entitled to a deduction, from the amount of income-tax (as computed before allowing the deductions under this Chapter) on his total income with which he is chargeable for any assessment year, of an amount equal to hundred per cent of such income-tax or an amount of two thousand rupees, whichever is less.

As it is clearly stated that "from the amount of income-tax on his total income with which he is chargeable"

And as i said earlier Surcharge is levied on Tax on Net Taxable income and HEC is levied on Tax + Surcharge.

Thanks

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