Ambiguity in interpretation of rebate/relief rs. 2000 as per

Rebate of income-tax in case of certain individuals.

87A. 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.

       It is a deduction from the amount of income tax on total income which should be considered while making TDS. There is no authority for employers argument.

        Total income means income after chapter VIA deductions ie. net income

Lot of people are confused regarding this provision. Employers wants to deduct TDS thinking that they might receive a short TDS deduction notice, whereas employees do not want to pay more tax today only to receive a refund a few months after. But if we look at the technical definition of rebate, it is "pay back a sum of money". Here the wording says that the tax paid by the assessee, shall be eligible for a refund of Rs. 2000/- provided the conditions laid down u/s 87A are fulfilled. Therefore, the section is treating an assessee eligible to receive a refund. This is just my interpretation. I maybe wrong.

Hi All,

The following links/attachments may give you clear picture of Sec. 87A Deduction. Pls go through:

1. Attachment:  Open the attachment & Type Password: aubsp

2. Go to this web address:  https://www.charteredclub.com/section-87a-rebate/

Sources: AUBSP.com; Chartered Club.com

Thanks & Regards,

Ravi

Thank you, so much every one.

I have understood the mechanics of the calculation.

My question is as follows:

Originally posted by : e.filer B.Com/ Hyderabad
	RAVINDRA,YOU did not understand anything. Consult a CA OR the CA of your college personally.  Otherwise yu are vasting (y)our? time.

Sorry that you feel offended. I am not a CA or a B. Com, but I happen to be an IITian.

Hi,

TDS should be deducted net of rebate. No need of paying and claiming refund of the same. Instead ask ur employer to consider rebate of Rs.2,000 before deducting TDS.