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What is an Income Tax Rebate? |Who will be eligible for Rebate under Section 87A |

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In this article, we are learning about the meaning of Income Tax Rebate and Eligibility Criteria specified under section 87A of income Tax Act,1961. Basically Rebate is given to small resident taxpayer to reduced their Tax burden.
What is an Income Tax Rebate?
In a simple Words Rebate means a partial refund to the taxpayer who has paid too much for tax.
As per Income Tax Act,1961 Income Tax Rebate means a refund on taxes when the liability on tax is less than the tax paid by the individual. Taxpayers generally receive a refund on the income tax if they have made payment of tax more than they owe.

Eligibility to Claim Rebate Under Section 87A for A.Y.2018-19
An assessee, being an Individual Resident in India, whose total income does not exceed RS. 3,50,000 shall be entitled to claim a Rebate as Lower of following two things,
1. An amount equal to 100% of his Income Tax,
OR
2.An amount of RS. 2500

Points to Notes while Claiming Rebate (Condition to claim Rebate)

  • Rebate is available only to a Resident Individual assessee.
  • Rebate cannot exceed the Tax Payable.
  • For claiming Rebate, the Total Income should be less than or equal to RS.3,50,000.
  • Total Income means Gross Total Income after allowing deductions under section 80C TO 80U.
  • Education Cess is added after availing Rebate.
  • Non-Residents are not eligible for Claiming a rebate under 87A.
  • HUF or Firms or Companies are not eligible for Claiming a rebate under 87A.

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