Feb. 9, 2021, 4:32 p.m.
An income tax rebate can simply be understood as a form of refund on taxes that you receive from the Income Tax Dept.
Any individual with an annual taxable income of up to Rs 5 lakhs is eligible for an income tax rebate of Rs 12,500. This essentially translates to the fact that individuals with an annual income lower than Rs 5 lakhs are entirely exempted from income tax and can effectively save income tax in India.
An income tax rebate can simply be understood as a form of refund on taxes that you receive from the Income Tax Dept.
Any individual with an annual taxable income of up to Rs 5 lakhs is eligible for an income tax rebate of Rs 12,500. This essentially translates to the fact that individuals with an annual income lower than Rs 5 lakhs are entirely exempted from income tax and can effectively save income tax in India.
Eligibility to claim rebate u/s 87A:
Here are the criteria you must fulfill to avail tax rebate under Section 87A in FY 2020-2021:
You must be a resident individual taxpayer of India.
Your total annual taxable income after applicable deductions (such as under Section 80) should not exceed Rs 5 lakhs in a financial year.
You can avail a tax rebate capped at Rs 12,500. Therefore, if your total tax payable is less than this amount, only such amount is eligible for the tax rebate offered under section 87A, rebate can’t be more than the tax payable. Keep in mind that the education cess of 4% is added after the tax rebate on tax liability.