Income Tax Rebate Under Section 87A For A.Y. 2017-18 (F.Y.2016-17)
Durgesh Vashisth durgeshvashisth@gmail.com 9899812287
Rebate of up to Rs. 5,000 for resident individuals having total income of up to Rs.
5,00,000 as per Sec-87A of Income Tax Act, 1961 for A.Y. 2017-18 i.e. F.Y. 2015-16.
The rebate shall be equal to the amount of income tax payable on the total income
for assessment year 2017-18 or an amount of Rs. 5,000, whichever is less.
Key Point :-
Individual residential of India,
Whose Total Income is up to Rs. 5,00,000,
Shall be allowed a rebate,
From Income Tax,
100% of Income Tax or Rs.5,000, Whichever is Less.
Relief of Rs.
5000 from Tax
Payable
(5000)
Total Income
should be UPTO
Rs 5 Lakh
Income Tax Rebate Under Section 87A For A.Y. 2017-18 (F.Y.2016-17)
Durgesh Vashisth durgeshvashisth@gmail.com 9899812287
Example 1
Compute the tax liability of X Ltd., a domestic company, assuming that the total
income of X Ltd. Is Rs. 2,80,000.
Answer Rs.
Tax on total income@30% of Rs.2,80,000 84,000
Less: Rebate under section 87A* ( - )
84,000
Add: Education cess@2% 1,640
Secondary and higher education cess@1% 840
Total tax liability 86,480
*As per section 87A the rebate of Rs. 5,000 is allowed to residential individual.
Example 2
Compute the tax liability of Mr. X, a salaried employee (age: 45 years), assuming that
the total income of Rs. 4,80,000. During the previous year ending on March 31, 2017.
Answer Rs.
Tax on total income@10% of Rs.2,30,000 23,000
(Rs.4,80,000-2,50,000)
Less: Rebate under section 87A (5,000)
18,000
Add: Education cess@2% 360
Secondary and higher education cess@1% 180
Total tax liability 18,540
*As per section 87A the rebate shall be equal to the amount of income tax payable or
an amount of Rs. 5,000, whichever is less.
Income Tax Rebate Under Section 87A For A.Y. 2017-18 (F.Y.2016-17)
Durgesh Vashisth durgeshvashisth@gmail.com 9899812287
Example 3
Compute the tax liability of Mr. X, a salaried employee (age: 45 years), assuming that
the total income of Rs. 2,60,000. During the previous year ending on March 31, 2017.
Answer Rs.
Tax on total income@10% of Rs.10,000 1,000
Less: Rebate under section 87A (1,000)
-
Add: Education cess@2% -
Secondary and higher education cess@1% -
Total tax liability -
*As per section 87A the rebate shall be equal to the amount of income tax payable or
an amount of Rs. 5,000, whichever is less.
a) 10000*10% = 1000
b) 5000
Rebate allowed of Rs.1000.
Income Tax Rebate Under Section 87A For A.Y. 2017-18 (F.Y.2016-17)
Durgesh Vashisth durgeshvashisth@gmail.com 9899812287
Example 4
Compute the tax liability of Mr. X (age: 45 years), assuming that the total income of
Rs. 5,40,000. During the previous year ending on March 31, 2017.
Answer Rs.
Tax on total income@10% of Rs.2,90,000 29,000
Less: Rebate under section 87A ( - )
29,000
Add: Education cess@2% 580
Secondary and higher education cess@1% 290
Total tax liability 29,870
*As per section 87A the rebate shall be equal to the amount of income tax payable or
an amount of Rs. 5,000, whichever is less.
Income Tax Rebate Under Section 87A For A.Y. 2017-18 (F.Y.2016-17)
Durgesh Vashisth durgeshvashisth@gmail.com 9899812287
Example 5
Compute the tax liability of Mr. X, a salaried employee (age: 45 years), assuming that
his casual income of Rs. 4,80,000. During the previous year ending on March 31,
2017.
Answer Rs.
Tax on total income@30% of Rs.4,80,000 1,44,000
Less: Rebate under section 87A (5,000)
1,39,000
Add: Education cess@2% 2,780
Secondary and higher education cess@1% 1,390
Total tax liability 1,43,170
*As per section 87A the rebate shall be equal to the amount of income tax payable or
an amount of Rs. 5,000, whichever is less.
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