If 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?
No assese cannot claim rebate as the income after deduction is taken for claiming Rebate
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.
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.
I made a mistake he can claim rebate if the scenario is 490000. If not he cant. really soory. I thought the other way
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
