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Rebate Under Section 87a

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The rebate under section 87A is a deduction from tax payable on the income of an individual. The amount of rebate is based on the tax bracket in which the individual falls. The purpose of the rebate is to provide relief to taxpayers in the lower income brackets.

Rebate Under Section 87a

What is the Rebate Under Section 87a?

The rebate under section 87a is a tax deduction that is available to individuals who have earned income from certain sources. The rebate is equal to the lesser of:

  • the tax payable on the income; or
  • $2000.

To be eligible for the rebate, an individual must have filed a tax return for the relevant year and must have been resident in Australia for at least part of that year. The rebate is not available to companies or trusts.

What are the Conditions to Avail the Rebate Under Section 87a?

To avail the rebate under section 87A of the Income Tax Act, 1961, the individual must meet the following conditions:

  • The individual must be a resident of India.
  • The individual’s total income must not exceed Rs. 5 lakhs.
  • The individual must not be availing any other rebate or deduction under any other section of the Income Tax Act.

Who is not Eligible for the Rebate Under Section 87a?

If you are not an Australian resident for tax purposes, you are not eligible for the rebate under section 87a.

What are the Benefits of Availing the Rebate Under Section 87a?

Assuming that the rebate under section 87A of the Income Tax Act, 1961 is being discussed, the following points can be made in answer to the question posed:

  • The rebate under section 87A is available to individual taxpayers who have a total income of up to Rs. 5 lakh for the financial year.
  • The rebate amount is equal to 100% of the tax liability or Rs. 2,500 whichever is lower. This means that a taxpayer with a tax liability of Rs. 10,000 will get a rebate of Rs. 2,500 (100% of Rs. 10,000).
  • The rebate under section 87A can be claimed by furnishing proof of income tax liability (e.g., Form 16) along with the income tax return (Form ITR).
  • The rebate under section 87A is available for assessment years starting from FY 2014-15 (AY 2015-16).
  • The rebate under section 87A can be claimed only once in a financial year and cannot be carried forward to any other year.

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