Section 87A Tax Rebate for FY 2017-18 & AY 2018-19
Income Tax Rebate US 87A is provided by IT department.Income tax department has reduced the rebate amount In the current fy 2017-18.
Further it is worth noting that you can claim tax rebate only if you satisfy the following conditions:
- your net income(Gross salary-Deductions u/s 80c max rs 150000)should be less than or equal to 3.5 lakhs.
- your age must be less than or equal to 80 years.
- Maximum rebate is rs 2500.
How to calculate income tax rebate under section 87A
Suppose your gross income is 5 lakhs.And your saving u/s 80c is rs 150000.
So the net income becomes rs 350000.Hence your net income is rs 350,000.
In this case you are elligible for tax rebate.
Further as you know in the current fy year 2017-18 if your net income is less than or equal to 5 lakhs,then 5% tax rate will be applicable.
Moreover upto first rs 250,000 there is no tax.
Hence in this example rs 350000-250000=50000.
Lastly 5% of 50000 will be 2500.And now deduct 2500 rebate from taxable income 2500.
So your tax becomes zero.
Important Note: Super senior citizens having age greater than 80 years do not come under rs 2500 rebate category.
At the end we can conclude that we should plan our tax saving in such a way that we can get Income Tax Rebate US 87A.