The subject of income tax is a tricky one to understand. There are a number of nuances you will need to master to be able to approach it in the right way. Without doing the necessary homework, a lot of people get confused. During the tax season, many are stressed out trying to figure out the ways to file the income tax returns in a smart way. In fact, without knowing the different legitimate provisions, many people end up paying more taxes than what is necessary. Rebate under 87A is a very useful section of the income tax law in India. Knowing about it can help you save on your taxes.
Never hesitate to learn
To understand the basics of the income tax law, you need not be a graduate in accountancy. Taxation is everyone’s subject and hence you must give some time to consult authentic sources to become familiar at least with some important segments of taxation laws. There are no doubt a lot of tax consulting professionals and agencies. However, quite often they might not give you a clear picture of the taxation laws. When you learn some important topics related to tax laws, you will be surprised on how much you can save on taxes.
Income tax rebate
Income tax rebate is a very important topic related to taxation. This is because it equates the tax in reference to the income brackets.
Highlights of Section 87A Income Tax Rebate
- This refund is available only for Indian residents. To be able to get this refund, you must have your Aadhaar card and birth certificate proving your Indian citizenship. Once you have them, you can file for tax
rebate under Section 87A . Know that non-resident Indians cannot apply for this rebate under this section. - Men and women can both avail of this rebate. To be able to benefit from this rebate, your income must fall under the specific bracket.
- Rebate under the 87A clause is applicable to the individuals under a specific income. This will mean that the individuals whose income does not exceed Rs. 3,50,000 per annum can claim the rebate under Section 87A. the rebate allowed under 87 A clause has an upper cap of Rs. 2,500. This rebate is applied before adding up the Education cess which is 3%. Those individuals with a taxable income of between Rs. 3,50,000 and Rs. 5,00,000, are eligible to claim a maximum rebate up to Rs. 5,000.
- This rebate is available only to individuals. So, Hindu undivided families (HUFs), firms and companies will not be able to apply for this rebate under this section. Section 87A is applicable only to individuals who wish to avail of the tax rebate provision.
A lot of people try to avoid paying taxes or project only less of their income in order to evade taxes or make illegitimate savings on taxes. Tax evasion is a serious offense and can lead to heavy fines and imprisonment. It is, therefore, necessary for all individuals to learn about the subject of income tax and file the income tax returns properly from time to time.