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Introduction of Section 87A – Income Tax Rebate

A new section 87A by Finance bill 2013 has been introduced for Income Tax Deduction of Rs. 2000/- for Assessment Year 2014-15. This rebate can be availed Tax payer/Assessee under section 87A. It is necessary to read clauses 19 and 20 of the bill to make it more clear-

Clauses 19 and 20 of the Bill seek to amend section 87 and insert a new section 87A in the Income-tax Act relating to rebate of income-tax in case of certain individuals.

The proposed new section 87A seeks to provide that an assessee, being an individual resident in India, whose total income does not exceed five hundred thousand rupees, shall be entitled to a deduction, from the amount of income-tax (as computed before allowing the deductions under Chapter VIII of the Income-tax Act) on his total income with which he is chargeable for any assessment year, of an amount equal to hundred per cent of such income-tax or an amount of two thousand rupees, whichever is less.

Consequential amendments have been proposed in section 87, so as to provide reference to proposed new section 87A.

Note:

  • These amendments will take effect from 1st April, 2014 and will, accordingly, apply in relation to the assessment year 2014-15 and subsequent assessment years.
  • Rebate is available only to individuals
  • No rebate to Non Resident.
  • If the total tax payable is less than Rs. 2000/-, rebate is restricted to “total tax payable”.
  • Rebate benefit is not applicable to a super senior citizen, since he is already fully exempted up to Rs. 5 lakh.
  • Above amendment does not mean that basic Exemption Limit has been raised from Rs. 2,00,000/- to Rs. 2,20,000/-.
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  • vijay sharma says:

    CAN WE CLAIM REBATE U/S 87A OF INCOME TAX IF TAXABLE INCOME UNDER RS. 5 LACS INCLUDING OTHER INCOME (INTEREST, COMMISSION, RENT ETC)

    January 3, 2014 at 12:34 pm
    • GAURAV SINGHAL says:

      Dear Vijay Sharma. Rebate of rs 2000/- u/s 87A is allow on Total income upto or less than 5 lakhs.
      So it will include all taxable income like Rent, commission etc..

      April 27, 2014 at 6:19 pm
    • SHIV GUPTA says:

      This is Rebate is apply on Total Salary Income Or Total annual Income ???

      July 9, 2014 at 7:58 pm
      • CA Sandesh Nikam says:

        Rebate is apply for Total Annual income after deduction under Chapter VIA but before Rebate under Section 87

        August 23, 2014 at 10:13 am
  • Gurpreet Singh says:

    For taking deducation u/s 87A, Does Total Income means, income calculated after considering deducation u/s 10, 80c, 80d and 80tta ?

    Pls. reply on my email id

    Regards,

    January 5, 2014 at 4:50 pm
  • c.c.pantola says:

    CAN WE CLAIM REBATE U/S 87A OF INCOME TAX IF TAXABLE INCOME UNDER RS. 5 LACS INCLUDING OTHER INCOME (INTEREST, COMMISSION, RENT ETC)

    January 22, 2014 at 4:31 pm
  • anand prakash arora says:

    For taking deducation u/s 87A, Does Total Income means, income calculated after considering deducation u/s 10, 80c, 80d and 80tta.or only gross income ?

    Pls. reply on my email id

    Regards,

    January 22, 2014 at 11:17 pm
    • CA Sandesh Nikam says:

      Yes

      August 23, 2014 at 10:14 am
  • Hanumanth says:

    under section 87A effected by 2013-14 financial are not

    January 29, 2014 at 11:22 am
  • Nilesh Varik says:

    This is Rebate is apply on Total Salary Income Or Total annual Income ???

    January 29, 2014 at 1:18 pm
    • Syed Arif Ali says:

      According the Rebate U/s.87A if the Individual Taxable Income Upto Rs.5 Lakh there are applicable for that benefit.

      January 30, 2014 at 4:00 pm
  • Syed Arif Ali says:

    The Rebate U/s.87A are applicable for taxable income upto the Rs.5 Lakh but how calculate Rebate U/s.87A under the Form.16

    January 30, 2014 at 3:12 pm
  • aneesh ahmad says:

    Thanks for the guide. Would never be able to work it out myself though. One for the accountants.

    February 1, 2014 at 11:33 am
  • Chandra says:

    what does total income mean? is it gross or after deducted 80c? reply in mail please

    February 2, 2014 at 5:07 am
  • hitendra says:

    2000 will detuct from cal tax or total income. Can it use for13-14

    February 5, 2014 at 12:15 am
  • RAJENDRAN.M says:

    a) The section 87A seeks to provide that an tax payer being an individual, whose total Taxable Income does not exceed 5,00,000/-( After deduction of U/s 10,16,80C and under chapter VI A).

    b) Rebate under section 87A – A resident individual (whose net income does not exceed Rs. 5,00,000) can avail rebate under section 87A. It is deductible from income-tax before calculating education cess. The amount of rebate is 100 per cent of income-tax or Rs. 2,000, whichever is less.

    Can you clarify me which one of the above statement is correct.

    February 8, 2014 at 1:58 pm
  • KAMALA says:

    Is this applicable to senior citizens?

    February 8, 2014 at 3:22 pm
    • CA Sandesh Nikam says:

      Yes for age between 60 to 80 years

      and no for Above 80 age ( super senior citizens)

      August 23, 2014 at 10:17 am
  • anjali mundra says:

    for claiming deduction under section 87A Does Total Income means, income calculated after considering deducation u/s 10, 80c, 80d and 80tta.or only gross income ? and CAN WE CLAIM REBATE U/S 87A OF INCOME TAX IF TAXABLE INCOME UNDER RS. 5 LACS INCLUDING OTHER INCOME (INTEREST, COMMISSION, RENT ETC)

    February 15, 2014 at 12:15 pm
    • Srikant Misra says:

      Total Income means: Taxable income after all exemptions and deduction

      February 15, 2014 at 7:47 pm
  • VIPIN SHARMA says:

    HOW I CLAIM DEDUCTION U/S 87A WHETHER DEDUCTION U/S 10/ 80C/ CAN BE TAKEN OR NOT ALSO GUIDE ME WHAT DEDUCTIONS COMES UNDER CHAPTER 8 OF INCOME TAX STEP BY STEP. WHETHER 87A ALSO APPLIES FOR BUSINESS CLASS AS A PROPRIETOR. KINDLY CLARIFY ME THROUGH MY E.MAIL ID
    REGARDS VIPIN SHARMA

    February 17, 2014 at 1:56 pm
  • ASHOK KUMAR MEHAN says:

    my gross income is 639000 and after deductintg transport,dhs,rent paid etc of rs. 90000 balance is rs.549000/- and again deducting my savings of tution fee, gpf.lic.pli and insurance taxable income becomes rs. 449000/- is i can avails rebate of rs. 2000/- from my total tax of rs.24900/-

    February 18, 2014 at 1:59 pm
  • BINAYA KU CHAKDAR says:

    can we claim 2000/- according to 87A of I.T act from total tax payble.

    February 19, 2014 at 6:36 pm
  • BINAYA KU CHAKDAR says:

    can we claim RS2000/- u/s87A of I.T Act from gross income or total tax payble

    February 19, 2014 at 6:39 pm
  • BINAYA KU CHAKDAR says:

    can we claim RS2000/- u/s87A of I.T Act from gross income or total tax payble.

    February 19, 2014 at 6:41 pm
  • Nitish Kumar says:

    in deducted rs. 2000.00 on total tax payble
    valid gross income under rs.500000.00

    March 3, 2014 at 9:27 pm
  • Uttam Mukherjee says:

    From my idea about u/s 87A total taxable income means after deducting all deductios (sec10,16,Chapter 6,88 to 80U ) except chapter 8 i,e,retirement beneffits My statement is correct or not

    March 19, 2014 at 5:27 pm
  • SEO says:

    I like to disseminate knowledge that will I have built up with the 12 months to assist improve
    team efficiency.

    March 21, 2014 at 4:34 pm
  • R M Jog says:

    Some web sites indicate that deduction of Rs 2,000 from total tax Liability is applicable to persons below 60 years of age and can not be availed by persons in the St Citizen category. Is this true?

    March 22, 2014 at 12:12 am
  • pandurang naik says:

    let me confirm my income is rs 245000/- and my investment under sec 80c is Rs.20000/- and I don’t have any investment so my taxable income is 25000/- after standard deduction, so rs.2575/- is total tax payable by me so I will get benefit in this rs 2000/- under se 87 a and tax payable is Rs.575/- only please confirm I am right.

    March 27, 2014 at 11:29 am
  • VISHAL says:

    Kindly advise where to enter rebate u/s 87A in the TDS return. As we are not able to find the column in RPU.

    April 9, 2014 at 1:40 pm
  • LALIT says:

    DEAR SIR,
    KINDLY TELL US HOW TO REFLECT REBATE OF RS 2000/- IN TDS RETURN AS THERE IS NO COLUMN IN TDS RETURN FOR ALLOWING TDS REBATE.
    If taxable salary comes rs 235000/-
    Tds is rs 1500/- after taking rebate of rs 2000/-

    if i mentioned this in tds return then default will generate.

    kindly advise ….it will be help ful to us.

    April 17, 2014 at 4:49 pm
  • b.sekar says:

    Dear friends. we can thank for the rebate of sec.87-a, given by the Govt, but how can we show in the form 16 or first ofall in the Quarterly return of 24Q to be filed before 15.05.14. As the people who are filing the return are not so familiar with this, they asked my friend to reduced the taxable income to the tune of 20000/-. He did it and filed the same. He got an intimation from the TDS dept, stating interest has to be paid for the short deduction of tds. He is going to remit the interest? where should I show the Rs.2000/- in form 24Q annextures and also in form 16….sekar

    April 25, 2014 at 12:33 pm
  • BANWARI LAL says:

    my total income from salary RS. 540000/ CAN I APPLIED FOR 87A BENEFIT RS.2000.

    April 28, 2014 at 11:58 am
  • Grw says:

    Is this applicable for 2014-15 FY?

    April 28, 2014 at 1:38 pm
  • vinod sahu says:

    whether individual claiming exemption 87A is responsible for TDS liability.?

    May 1, 2014 at 11:47 am
  • Askar says:

    Rebate u/s 87A where to show in etds return.. can any one help… ?

    May 5, 2014 at 9:05 pm
  • DHAIWAT TRIVEDI says:

    DO WE NEED TO SHOW REBATE U/S. 87A IN FORM 16 (SALARY CERTIFICATE)? IF YES WHERE?

    May 13, 2014 at 2:54 pm
  • ANAND SONI says:

    IF MY INCOME IS RS. 255000. AND 80C IS RS. 25000. THEN MY TAX LIBILITY WILL BE RS. 1000 AFTER REBATE OF RS. 2000. REPLY ME

    May 16, 2014 at 10:45 am
  • ANAND SONI says:

    WE NEED TO SHOW 87A IN TDS RETURN

    May 16, 2014 at 10:48 am
  • vipul shah says:

    net taxable income 261953
    income chargeble for special rates – short term capital gain rs.4952
    total income rs.266905
    gross tax on 261953 – normal rate rs.1195
    gross tax on 4952 – special rate rs.743
    total tax rs.1938
    cliam tax rebate u/s 87a rs.1938 or 1195
    tax payable rs. nil or 743
    pl give answer total income of individual resident india below 5 lacs income including short term capital gain are availed benefits of sec.87a Rs.2000

    May 19, 2014 at 8:25 pm
  • Rekha Gupta says:

    whether refund can be claimed for SAT paid in case of default made in taking the rebate u/s 87 A pls reply

    May 26, 2014 at 11:51 am
  • Dr.B.S.Bakshi says:

    What format “certificate of payment received by landlord” is required for availing rebate under 87A by an individual pensioner

    June 19, 2014 at 12:23 pm
  • Nagaraj T V says:

    11-07-2014
    Sir, Please clarify on the following:-

    Deductions under section 80C (under chapter VI) – Rs.1,00,000/- (cap)
    What does chapter VII cover? _ what are the sections thereunder?
    What are the deductions under chapter VIII – what are the sections thereunder?

    July 11, 2014 at 7:43 pm
    • Nagaraj T V says:

      11-07-2014
      Sir, Kindly clarify this doubt:-

      My son and myself have jointly availed housing loan for Rs.20,00,000/-
      We both are co-borrowers of the housing loan.
      1) I am a pensioner.
      2) My son is an employee.
      3) House property is in my name – sale deed is in my name.
      4) My son pays all the instalment (e.m.i.) from his monthly salary.
      5) I do not repay housing loan from my pension.
      The doubt:- Is my son eligible to 100 per cent tax deduction for
      – paying interest on housing loan
      – and for paying housing loan.
      That is house property is mine but my son repays housing loan
      for having constructed I floor over the house.

      If there is any problem with this, how to ensure that my son gets
      full benefit in order to reduce tax liability.
      My son pays around Rs.2,50,000/- per annum from his total salary.

      Please clarify.

      July 11, 2014 at 7:54 pm
  • Ramachandran Iyer says:

    Is the benefit under Section 87A continues for the next AY 2015-16?

    July 28, 2014 at 11:31 am
  • Mrs Elvis Mary says:

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    lewisharry_lending@hotmail.com Thank You All For Your Understanding.

    August 27, 2014 at 3:44 pm
  • Sachin says:

    Q.While calculating TDS on Salary by employer Rebate u/s 87a should be consider or not ?

    September 26, 2014 at 4:56 pm

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