Tax rebate is available under section 87-A under new tax duty? With Automated Income Tax Arrears Relief Calculator U/s 89(1) along with Form 10 E for the F.Y.2021-22

 

Tax rebate is available under section 87-A under new tax duty? As per Finance Bill 2020, the margin limit of tax rebate was revised to Rs. 12,500 for F.Y.2016 / F.Y2017. This tax exemption is applicable if the taxable income of a person (resident including senior citizen) is less than or equal to Rs. 5 lakhs.

 

Finance Bill 2020 introduced a new tax system, proposing lower rates of income tax for individuals with 10%, 20%, and 30% slab rates, as well as 15% and 25% slab rates.

People who are reluctant to pay taxes under the new proposed following personal income tax system will have to cancel almost all tax breaks that you are claiming under the old tax structure.

 

Thus, all exemptions under Chapter VI-A can not be entitled to those who opt for the new tax discipline as well as the regime.

You may also, like- Automated Income Tax Form 16 Part B for the F.Y.2020-21 in Excel [This Excel Utility Can Prepare at a time 50 Employees Form 16 Part B as per New and Old Tax Regime]

 

However, what about the Rs 12,500 income tax rebate? Can you claim an exemption under Section 87-A under the new tax regime for A.Y 2022-23?

 

Let's first understand what is meant by tax rebate?

What is tax exemption?

 

When the tax payable is less than the tax payable or the tax payable, the tax refund is tax-deductible

 

Tax rebate against tax rebate FY 2021-22 / AY 2022-23

 

Tax income tax deduction can be claimed from a specific source of income (e.g. salary) and not from total income. Ex: HRA

 

A head income tax deduction can be claimed under each head and also from the total income. Under various sections of the Income Tax Act, taxpayers can claim a rebate for specific expenses or certain investments.

 Example: Investments Under Chapter VI-Aincluding Section 80C

• Meanwhile, income tax exemption can be claimed from the total tax payable. Thus, exemptions and rebates from income is allowed to be claimed and a rebate from taxable taxes is allowed.

 

Treatment and applicability of rebates under section 87-A  for the A.Y 2022-23

Now that you understand what a tax deduction is, let’s get to the ‘main point’. Can you claim a rebate of Rs 12,500 in Section 87-A under both the old and new tax system?

You may also, like- Automated Income Tax Form 16 Part A&B for the F.Y.2020-21 in Excel [This Excel Utility Can Prepare at a time 50 Employees Form 16 Part A&B as per New and Old Tax Regime]

 

The answer is yes. Section 87A tax exemption is available under both new and old tax system for F.Y 2023-22 / A.Y 2022-23

Individuals with an income tax of up to Rs, 5 lakh will be eligible for tax exemption under section 87A of up to Rs 12,500, resulting in zero duty under the old and new tax system.

 Rebate of 87-A for F.Y 2021-22| The Maximum limit is Rs. 12,500/- U/s  87-A for the F.Y 2021-22/ A.Y 2022-23. This means that if the total duty payable is less than Rs 12,500, that amount will be deducted under 87 A. This charge is applied to the total fee before adding the education fee (4%).

 

 Only those who have received free income tax up to Rs. 5 lakhs can enjoy the assessments at tax/exemption 87 -A.

 

Example: Suppose your gross Salary same financial year comes to Rs 6,50,000the same financial year comes to Rs. 6,50,000ed` and you claim 1,50,000 U / S 80C (available under the old tax system). In your case, the total net income comes to Rs.5,00,000 which qualifies you as a claim for tax exemption of Rs.12,500.

 

Tax The amount of tax exemption U/s 87A is limited to a maximum of Rs.12,500. If the assessed tax payable is less than Rs.12,500, the tax deduction of Rs.10,000 will be limited to that lesser amount i.e. Rs.10,000.

You may also, like- Automated Income Tax Form 16 Part B for the F.Y.2020-21 in Excel [This Excel Utility Can Prepare at a time 100 Employees Form 16 Part B as per New and Old Tax Regime]

 

As the tax assessor first has to add all income such as salary, household income, capital gain, business or professional income, and income from other sources, and then the amount of the eligible tax deduction is deducted from U/s 80C to 80U and section 24 B (Household interest) comes with net taxable income. (If you opt for a new tariff system, you will not be able to claim an income tax deduction in U/s 80c, 80d, etc.)

 

Taxable income                                   Rebate U/s 87A

2,000. 3,00,000 / -                                           2500 / -

2,000. 3,50,000 / -                                           5000 / -

2,000. 4,00,000 / -                                           7500 / -

2,000. 5,00,000 / -                                           12500 / -

2,000. 5,00,100 / -                                           zero

 

Above, if the above net taxable income is less than Rs. 5 lakhs, then the tax deduction of Rs.12,500

 

Applicability of rebate in Under Section 87-A | For (Non-Senior Citizen Tax Assessor)

 

Questionnaires related to rebates under Section 87A AY 2021-22

 

Can NRIs claim an exemption under Section 87A? - No, this tax exemption is only allowed for resident Indians. Therefore, taxpayers who qualify as non-resident Indians are not eligible for exemption under 87A.

You may also, like- Automated Income Tax Form 16 Part A&B for the F.Y.2020-21 in Excel [This Excel Utility Can Prepare at a time 100 Employees Form 16 Part A&B as per New and Old Tax Regime]

 

Can this discount be claimed by any firm or organization? - This discount is for individuals only. HUFs or firms or organizations cannot claim this tax exemption.

 

Need to add cess and other charges (if any) before or after claiming this tax rebate? - Scholarships and SECEC are levied on the fees payable after allowing tax exemption up to Rs 12,500.

 

Is Income Tax Exemption U / s 87A available in Long Term Capital Gains (LTCG)? –

 

Rebate U/s 87A is not available for sale or transfer of equity shares, such as on the equity specified under section 112A or on long-term capital gains from others. It is available for all other capital gains.

 

 

My taxable income is less than five lakh rupees, so my tax liability will be taxable. Can I still require filing my tax return for F.Y 2021-22 / A.Y 2022-23?

 

You can avail of a zero-duty facility, but you still have to submit your Income Tax Return (ITR).

 

The income tax exemption limit for all citizens below the age of 60 is still Rs 2.5 lakh. Therefore, if you earn anything beyond this annual basic discount limit, you are required to file your ITR.

 

Download Automated IncomeTax Arrears Relief Calculator U/s 89(1) along with Form 10E from the Financial the Year 2000-01 to Financial Year 2021-22 (Up-to-date Version)