Section 87A provides an income tax rebate to a resident individual having prescribed income. This rebate is also available to senior citizens. However, for a Super Senior Citizens, this deduction becomes irrelevant.
For AY 2019-20 and AY 2020-21, the maximum income tax rebate is Rs.2,500/- and Rs.12,500/- respectively.
It is provided before the calculation of Cess of 4%.
Rebate under section 87A for AY 2019-20
Conditions to be satisfied
Under the following conditions rebate is allowed:
- You must be Resident Individual
- Total income* is up to Rs.3,50,000/-
If both the above conditions are satisfied, rebate under section 87A will be available.
*Total income is explained at the bottom of this article
Maximum Rebate
Rebate shall be lower of the following:
- Income tax before the rebate
- 2,500
Therefore, the maximum rebate for AY 2019-20 is Rs.2,500/-
Rebate under section 87A for AY 2020-21
In Budget 2019:
The tax rebate has been increased to Rs.12,500/-.
Through this amendment, every resident taxpayer having total income* up to Rs. 5 lakh won’t have to pay income tax.
Conditions to be satisfied
Under the following conditions rebate is allowed:
- You must be Resident Individual
- Total income* is up to Rs.5,00,000/-
If both the above conditions are satisfied, rebate under section 87A will be available.
Maximum Rebate
Rebate shall be lower of the following:
- Income tax before the rebate or
- 12,500/-
Therefore, the maximum rebate for AY 2020-21 is Rs.12,500/-
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