Income Tax Rebate under section 87A of Income Tax Act 1961

Tax rebate under section 87A provide for lower tax liability of an individual assessee, if the total income of an assessee is below the specified limit. It is being provided to reduce the tax burden of individuals having lower income.

In Financial year 2018–19, an individual can claim a maximum rebate of Rs. 2500 /- each year.

1. Eligibility to Claim Rebate Under Section 87A FY 2018-19 (AY 2019-20)

You can claim the rebate if you satisfy both the following conditions:

You are a RESIDENT INDIVIDUAL; and

Your Total Income Less Deductions (under chapter VI A) is equal to or less than Rs 3,50,000.

The rebate is limited to Rs 2,500. Which means if the total tax payable is lower than Rs 2,500, such lower amount of tax will be the rebate under section 87A. This rebate is applied on total tax before adding Education Cess (4%).

2. Eligibility to Claim Rebate Under Section 87A FY 2017-18 (AY 2018-19)

You can claim the rebate if you satisfy both the following conditions:

You are a RESIDENT INDIVIDUAL; and

Your Total Income Less Deductions (under Section 80) is equal to or less than Rs 3,50,000.

The rebate is limited to Rs 2,500. Which means if the total tax payable is lower than Rs 2,500, such lower amount of tax will be the rebate under section 87A. This rebate is applied on total tax before adding Education Cess (3%).