Since there has been a tremendous increase in the numbers of income tax return filers in very recent years, the Central Government has embraced this act of taxpayers , and as a result, in the Finance Snout 2019 introduced or rather I would say enhanced the existing income tax rebate u/s 87A of the I.T Act up to 12500 from the F. Y 2019-20. On the other hand, this visualization of the Government has made the middle-class people very much happier as this would leave them richer by Rs 12500 annually.
The Finance snout 2019 may be read to the extent of rebate clause only as follows:–
Clause 8 of the Snout seeks to update section 87A of the Income-tax Act to provide relief to the individual taxpayers by increasing the maximum value of tax rebate to twelve thousand five hundred rupees from existing two thousand five hundred rupees. The tax rebate shall now be open-door to taxpayers having total income up to five hundred thousand rupees, instead of existing three hundred fifty thousand rupees.
What is a Tax Rebate?
Before, going in to detail on should know what a tax rebate is all about. Rebate ways supporting your liability to pay tax but permitting you relief or deduction so that you don’t need to pay your tax liability on the fulfillment of unrepeatable conditions. These ways the Government is granting you a relief to pay tax up to an unrepeatable limit on attaining unrepeatable conditions. Further, as per Wikipedia, a Tax Rebate can be specified as the refund of taxes when the tax liability is less than the taxes paid.
So, a tax rebate is basically a refund of tax which an individual can requirement upfront from his income tax liability. There is a tax liability for you but you are not supposed to pay that as per the rebate u/s 87A. However, this tax rebate is workable only to the small taxpayers.
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Eligibility factors to requirement tax rebate u/s 87A for F. Y 2019-20
The pursuit factors or conditions need to be fulfilled surpassing ultimatum deductions or rebate u/s 87A.
• One needs to be a resident INDIAN;
• Your Net Taxable Income i.e. total income without all deductions u/s 80C to 80 U is less than or equal to Rs.5.00 Lakh;
• The maximum rebate U/S 87A is capped at Rs.12500 only. If your tax liability surpassing subtracting Cess@4% is unelevated Rs.12500, then you will be unreliable rebate up to that value only;
• No Non-Resident Indian is entitled to this rebate;
• No HUF, partnership firm or visitor is entitled to this rebate.
Who can requirement tax rebate under section 87A?
As mandated by the finance snout 2019 the pursuit persons can requirement the tax rebate under section 87a.
• A resident individual;
• A resident individual whose Net Taxable Income i.e. total income without all deductions u/s 80 is less than or equal to Rs.5.00 Lakh;
• No Non-Resident Indian is entitled to this rebate;
• To requirement this rebate you must not be a HUF, partnership firm or company.
How much is the tax rebate under section 87A?
One should alimony in mind that this finance snout 2019 has just enhanced the rebate limit from existing Rs.2500 to Rs.12500 only. Rebate u/s 87a is not a new thing. Earlier moreover it was enforced subject to variegated income ceiling. So, the rebate u/s 87a is a mere summons under finance snout 2019.
For F.Y 2017-18 the existing rebate limit was Rs.2500 subject to net taxable income up to Rs 3.5 lakh. Now from F.Y 2019-20, it has been enhanced to Rs.12500 subject to net taxable income up to Rs.5 lakh.
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