Rebate u/s 87
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Rebate u/s 87

B.Siddheshwar Started The Discussion:

I want to know about Rebate u/s 87 of Income Tax? what are the provisions of section 87? How It is calculated?

korgaonkar k a - Member Since: Mar 2009
Dear Siddheshawar ji,

I think, you are talking about Section 87 A which is inserted in Income Tax Act recently in this year. According to it, an assessee being an individual resident of India, whose income is up to 5 lacs will get tax credit of Rs. 2000/-. Such Tax payers in the slab 2 to 5 lacs will get rebate in Tax of Rs. 2000/- at the time of filing the return.

Raj Kumar Hansdah - Member Since: Jun 2009
Dear Koragaonkar Ji

Thanks for your response.
Many of us are not aware of this provision.

Please elaborate more on this; such as :
Applicable from which Assessment year ?
How can the assessee take benefit of it ?
How the Tax credit will be given ?
Whether at the time of filing the IT Returns, one can deduct it (if there is still some Tax amount > Rs. 2000, still payable) ?
Or if it is already deducted as TDS; one can get a REFUND after filing returns ?

Do answer the above queries.

Warm regards.

korgaonkar k a - Member Since: Mar 2009
Dear Raj Kumar ji,

First of all, thanks for raising the questions. It compelled me to study this section.

I am not IT expert. But still, I have pleasure to reply you, Sir.

Quote:
Originally Posted by Raj Kumar Hansdah View Post
Applicable from which Assessment year ?
Applicable from AY 2014-15.

Quote:
Originally Posted by Raj Kumar Hansdah View Post
How can the assessee take benefit of it ?
It is a tax rebate and not a tax exemption. At the time of filing the return, one has to deduct the rebate amount from the tax payable. The IT authority will make provision in the form of return for tax payable after rebate.

Quote:
Originally Posted by Raj Kumar Hansdah View Post
How the Tax credit will be given ?
Answered as above.

Quote:
Originally Posted by Raj Kumar Hansdah View Post
Whether at the time of filing the IT Returns, one can deduct it (if there is still some Tax amount > Rs. 2000, still payable) ?
It is not a payment. It is a rebate in Tax. From the tax amount with surcharge, there will be deduction of this rebate.

Quote:
Originally Posted by Raj Kumar Hansdah View Post
Or if it is already deducted as TDS; one can get a REFUND after filing returns ?
Of course.

Marymol Antony - Member Since: Aug 2013
Dear Siddeshwar,

Thanks for the inputs - in my software, although the rebate was considered, the section was wrongly mentioned. Now i could correct it.

Thanks for all such information in Cite HR - This helps HR professionals like us to a great extent..

Marymol

Raj Kumar Hansdah - Member Since: Jun 2009
Dear Koragaonkar Ji

Thanks for your efforts and presenting the information in a clear, concise way.
This will be very useful especially for HR professionals and all employees in the tax bracket of Rs. 2 to 5 lakhs.

Please do keep posting such USEFUL information.

Warm regards.

HRsvarun - Member Since: Sep 2013
Dear Korgaonkarji,

Further to above, i would like to know, if the amount of Rs. 2000/- is deducted from the employee at the time of TDS deduction or is it refunded as claim from IT after we file the return?

korgaonkar k a - Member Since: Mar 2009
Dear HRsvarun,

It seems to me, you have made a mistake in your post / in your question. The word "or" in your question is wrongly put by you. If it is so, your question is - if the amount of Rs. 2000/- is deducted as TDS, is it refunded by ITO after we file the return?

Answer to this question is:

Any tax paid by you in excess, is refundable on filing the return. If your tax liability is nil but your employer has deducted Rs. 2000/- as TDS, you can claim it from ITO on filing the return.

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