Pramod.k (Accounts Manager) (82 Points)
25 February 2016If assessee has an income of Rs. 5,50,000 during the financial year and he is eligible for a deduction of Rs. 60,000 u/s 80C.
Is rebate u/s 87A applicable on net taxable income?.
In this case the total net income comes to Rs.4,90,000 is this makes assessee eligible to claim a tax rebate maximum of Rs.2,000?
JOEY TRIBIONI
(Article)
(200 Points)
Replied 25 February 2016
No assese cannot claim rebate as the income after deduction is taken for claiming Rebate
Pramod.k
(Accounts Manager)
(82 Points)
Replied 25 February 2016
U/s 87A - What does total income means?
Is it gross taxable Income less any tax deductions u/s 80C to 80U?
Please Guide me.
CMA Poornima Madhava
(CMA)
(13097 Points)
Replied 25 February 2016
Yes, rebate u/s 87A is available if the net income (gross total income - deduction u/s 80c to 80u) of resident individual is <=Rs.5 lacs.
JOEY TRIBIONI
(Article)
(200 Points)
Replied 25 February 2016
I made a mistake he can claim rebate if the scenario is 490000. If not he cant. really soory. I thought the other way
Rohit Goyal
(Financial and Taxation Consultant)
(206 Points)
Replied 26 February 2016
As per Section 87A:
Tax rebate in case of individual resident in India, whose total income does not exceed Rs.5,00,000; quantum of rebate shall be an amount equal to 100% of such income tax or Rs.2,000, whichever is less.
And, here Total Income = Gross Total Income - Deductions under Chapter VI-A
So, in your case, Rebate u/s 87A is available to Individual (550000 - 60000 = 490000, it's less than Rs.5,00,000)
Crux of Section 87A:
1. Total Income <= Rs.5,00,000
2. Rebate (Minimum of following) :-
a) 100% of Income Tax; or
b) Rs.2,000
Total Income = Gross Total Income - Deductions under Chapter VI-A
Alternatively, use following link to calculate your tax liability for AY 2016-17. You just need to input your data and it will calculate tax following all provisions automatically.
/share_files/new-version-of-income-tax-calculator-for-ay-2016-17-69445.asp
Thanks & Regards
Rohit Goyal
CAclubindia
