Sec.87a rebate and 80 deduction

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R.Balu

Accountant

27 Points Posted on 04 August 2014

Please provide suggessions for my questions which are given below.

1) Employee A's net salary is above 5,00.000. but his total income after chapter VIa deduction is below 5,00,000.

To apply TDS for such employee shall I give him sec.87A rebate of Rs.2000?.

2) If employee B's total income after chapter VIa deductions is below 5.00,000 as per his declaration but I am aware of that such employee's total income would be more than 5,00,000 (If we consider his other heads of income). Then Can I allow him Sec.87A Rebate of Rs.2000 to make TDS?

3) What are the deductions available U/s 80D for the F.Y. 2014-15 and A.Y. 2015-16

Thanks in advance

Have a nice day

Replies (3)

Kishor Bhat

CA final CS executive (from Bangalore)

2018 Points Posted on 04 August 2014

1. Yes, 87A provisions apply when 'total income' is below 5lakhs. 2. No. Dont consider 87A

Tribhuvan Aditya Singh

Student as well as Self-employed

3853 Points Posted on 04 August 2014

1. 87A will be available.... 2. you will allow 87A rebate on basis of declaration made. however when B files his return and declare other income in his itr which results in increase of his income above 5lakhs then he wont be eligible for rebate and thus he would have to pay excess tax of 2000 with cess..... 3. deduction of 80D is available in respect of medical prem. paid subject to max of 15000 or 20000 in case of individual or senior citizen respectively. additional deduction of 15000/20000 is available for medical prem. paid for dependent parents.

Vikas Gupta

Tax Executive

463 Points Posted on 05 August 2014

(1) As per sec. 87A of IT Act, maximum tax rebate upto Rs. 2000/- is allowed in case where assesse's net taxable income (after deducting chapter VIA deductions) doesn't exceed Rs. 5 lacs. Thus, Mr. A is eligible for maximum tax rebate upto Rs. 2000/- in this case.

(2) As explained above, since Mr. B's total income (under all the five heads of income) exceeds Rs. 5 lacs, he is not eligible for tax rebate.

(3) U/s 80D one can claim mediclaim insurance premium paid to an insurance company. Maximum amount of claim under this section is Rs. 15000/- (Rs. 20000/- for senior citizen). Amount spent in preventive health checkup upto Rs. 5000/- also falls u/s 80D. However, this is worh noticing that maximum deduction u/s 80D is Rs. 15000/- or Rs. 20000/- as the case may be.