REBATE UNDER SECTION 87A OF THE INCOME TAX ACT
A Rebate under section 87A is one of the provisions of Income-tax that helps the taxpayer’s tax liability. Section 87A of the Income-tax Act, 1961 provides a complete tax rebate for the F.Y 2019-20 to those who are having income around 5 lakhs.
You can claim the benefit of rebate under section 87A for F.Y 2020-21 only if the following conditions are satisfied:
Points to be noted:
Let us understand the section 87A more clearly with an example:
|Particulars||Person 'X'||Person 'Y'|
|Rebate u/s 87A||12,400||NIL|
|Total Tax payable||NIL||13,416|
NOTE: This section is applied for residents including senior citizens
In the above example, there is Tax collection of 13,416 from person Y against NIL tax collection from Person X while the difference of Net Income between them is just 4,000.
It appears to be unjust to collect Tax of around 13,500 more than the other person having income lower by just 4,000. There can be a further amendment in the section to provide at least marginal relief. Like in the above example the Tax collection should be restricted to Rs. 4,000.
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