Section 87A of ITA, 1961 : Section 87A: Rebate Of Income-Tax In Case Of Certain Individuals

Explanation using Example

Consider a scenario where Priya, a resident individual in India, has a total income of four lakh eighty thousand rupees for the financial year 2022-2023. Under Section 87A of the Income-tax Act, 1961, since Priya's total income is less than five hundred thousand rupees, she is eligible for a tax rebate. The income tax calculated on her total income before any deductions is ten thousand rupees. According to Section 87A, she can claim a rebate of the entire amount of ten thousand rupees since it is less than the maximum rebate allowed of twelve thousand and five hundred rupees. Therefore, her net payable income tax after the rebate would be zero.