Section 87A Rebate of Rs 2,000

Keeping in mind the tax burden of lower income bracket, the Finance Minister has provided a Rebate under Section 87A from Financial Year 2013-14 (AY 2014-15) onwards. The rebate shall be available if you satisfy both these conditions-

  • Your Total Income Less Deductions ( under section 80) is equal to or less than Rs 5,00,000

If both the above conditions are satisfied, rebate of Rs 2,000 will be available under Section 87A. The rebate is limited to Rs 2,000. Which means if the total tax payable is lower than Rs 2,000, such lower amount of tax will be the rebate under section 87A. This rebate is applied on total tax before adding Education Cess. This rebate is also available to Senior Citizens.

Here are a few examples of this Rebate allowed to Resident Individual including Senior Citizens –

Total Income Tax Payable before Cess Rebate u/s 87A Tax Payable +3% Cess
2,20,000 2,000 2,000 0
2,15,000 1,500 1,500 0
4,50,000 25,000 2,000 23,000 + 690
5,00,000 30,000 2,000 28,000 + 840

Here is a quick summary for you –

Section 87A

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