What is Section 87A?

Section 87A provides a tax rebate to individual taxpayers if their total income is less than Rs 5 lakh after claiming deductions. Hence, firstly determine taxable income after deductions to check the eligibility of the rebate. Calculate your gross total income and reduce deductions under Section 80C to 80U.

Who is eligible for section 87A?

Only the resident individuals shall be eligible to avail of the rebate under section 87A. 3. Besides, the senior citizens (those who are between 60 and 80 years of age) can claim the rebate under section 87A.

What is section 87A in income tax Act?

Section 87A was introduced in Finance Act 2003 which was changed from time to time. Presently an individual tax payer, who is resident of India for income tax purpose, is entitled to claim tax rebate up to Rs. 12,500 against his tax liability if your income does not exceed ₹5 lakh.

How is Section 87A rebate calculated?

If your net taxable income is less than or equal to Rs 5 lakh, (applicable from A.Y 20-21), you are eligible to claim rebate under Section 87A. However, if it exceeds Rs 5 lakh, you pay tax as per the slab rate you fall in during that particular year.

What is the rebate u/s 87A for AY 2020-21?

Q: What rebate u/s 87A is applicable for AY 2020-21? Ans: The rebate amount for AY 2020-21 is unchanged under the new and old tax regimes. The individual resident taxpayer with taxable income less than Rs 5 lakhs gets a total rebate of Rs 12,500 or the tax payable when it is less than Rs 12,500.

REBATE UNDER 87A OF INCOME TAX ACT FOR INCOME UNDER 5L l A.Y 2020-2021 l Section 87A of Income Tax

What is the rebate u/s 87A for AY 2022 23?

The maximum rebate under section 87A for the AY 2022-23 is Rs 12,500.

What is the rebate under section 87A for AY 2021 22?

The amount of rebate u/s 87A for FY 2020-21 (AY 2021-22) has been kept unchanged under both old and new income tax regime. A resident individual having taxable income upto Rs 5,00,000 will get a tax rebate of Rs 12,500 or equal to the amount of tax payable (whichever is lower).

Is 87A applicable in new tax regime?

Individuals having taxable income of up to Rs 5 lakh will be eligible for tax rebate under section 87A up to Rs 12,500, thereby making zero tax payable in the new tax regime.

What is basic exemption limit?

Basic Exemption

1. Maximum amount of income which is not chargeable to Income-tax in case of Individual, HUF/ AOP/ BOI/ Artificial Juridical Person. Rs. 2,50,000.

What happens if taxable income is above 5 lakhs?

5 lakh per annum will still need to pay tax as per their slab. If your income is between Rs. 5 lakh to Rs. 10 lakh, you will need to pay 20% of your taxable income to the government.

What are the new tax exemptions for 2020?

The standard deduction amounts will increase to $12,400 for individuals and married couples filing separately, $18,650 for heads of household, and $24,800 for married couples filing jointly and surviving spouses. For 2020, the additional standard deduction amount for the aged or the blind is $1,300.

What is the tax deduction for salary 2021?

From the AY 2020-21 onwards, a standard deduction of Rs 50,000 is available to all salaried individuals. Any medical and travel allowances are still non-applicable. Remember the standard deduction for salary cannot, in any case, exceed the amount of salary.

When was Section 87A introduced?

Section 87a of the Income Tax Act was introduced in Finance Act, 2013. The section was introduced to provide benefits to individuals whose total net income is below Rs. 5,00,000.

How do I claim 50000 standard deduction?

Standard deduction is a flat deduction of Rs. 50,000/- from your Income that is taxable under the head salaries. This tax benefit can be claimed irrespective of the actual amount spent on: Transport Allowance and.

What is the 2020 standard deduction?

The 2020 standard deduction is increased to $24,800 for married individuals filing a joint return; $18,650 for head-of-household filers; and $12,400 for all other taxpayers. Under the new law, no exceptions are made to the standard deduction for the elderly or blind.

How can I reduce my taxable income 2021?

What is the minimum income to file taxes in 2020?

Minimum income to file taxes

Single filing status: $12,550 if under age 65. $14,250 if age 65 or older.

Do I need to file a tax return if my income is less than 5 lakhs?

Many people believe that they don't need to file their tax returns if their total income is below INR 5 lakh, which is not really True. The real fact is that no changes have been made in the income slab for the two years, i.e. FY 2020-21 and FY 2021-22 by the central government.

How much tax should I pay for 6 lakhs?

Without Exemptions/Deductions, the tax calculator shows those earning Rs 6 lakh annual income will have to pay Rs 23400 as tax as per the new regime. The tax payable under the old regime without exemptions and deductions will be Rs 33,800. Thus the total tax benefit as per new regime would be Rs 10,400.

Can I claim HRA if I live in my own house?

Since you are residing in your own house, you will not be able to claim HRA. However, you will be able to claim tax benefits on both, the principal and interest repaid on the home loan.