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Rebate U/s 87A effect on TDS

Sourabh Ambure (student and entrepreneur) (132 Points)

25 September 2020

whether rebate u/s 87A (upto Rs.12500) is to be considered while calculating TDS on salary income, if net total income of person below 5.00 Lakhs ?

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8 Replies

Kumar Sushank (General Manager - Finance) (1040 Points)
Replied 25 September 2020

Yes, You can calculate accordingly.

1 Like

prasad Nilugal ( GST Practitioner & Accounts ) (14151 Points)
Replied 25 September 2020

you can apply for refund , if TDS deducted and your Income below 500000/-

1 Like

Sourabh Ambure (student and entrepreneur) (132 Points)
Replied 25 September 2020

Thanks , actually in this case tds was not deducted by employer giving effect to 87A as total income of employee below 5 Lakhs , so I was concerned about any default on part of employer for non deducting tds .

prasad Nilugal ( GST Practitioner & Accounts ) (14151 Points)
Replied 25 September 2020

I think he has to deduct TDS however , Can't do any thing now , If not deducted . If your income is bellow 500000/- whole Tax amount will be wipe out against rebate under section 87A of the Income Tax act . However , since your income is more 250000/- you have file return for F.Y 19-20 .

Sourabh Ambure (student and entrepreneur) (132 Points)
Replied 25 September 2020

Does employer have to face any consequences for non deduction tds if employee filed his return within due date.

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 27 September 2020

If income is below 5,00,000 than Employer is not liable to deduct TDS, as there is no tax TDS (have to consider rebate u/s 87A for calculating TDS Liability).

Second, if income of Employee is more than 2,50,000 than Employee is required to file income tax return, inspite of there is no tax payable/refundable.

1 Like

Sourabh Ambure (student and entrepreneur) (132 Points)
Replied 28 September 2020

Thanks , also Employer didn't file tds 24q return in this case showing salary , deductions , and rs.0 as tds as no tds applicable for all his employees
is it ok ?

Gulshan Arora (2 Points)
Replied 27 February 2024

No. Employers can not consider rebate u/s 87A and have to make TDS from the salaries of the employees without giving effect of such rebate benefit. Some Accounting Software Firms have been noticed by IT Dept. for doing so.