Tuesday, 28 November 2017

Rebate under section 87A for AY 2018-19 FY 2017-18 reduced to Rs. 2500/-


Rebate under section 87A for AY 2018-19 FY 2017-18 reduced to Rs. 2500/-

The Union Budget 2017-18 was presented on 1st February, 2017. With a reduction of tax rate to 5% (in place of existing 10%), the Government has reduced the rebate u/s 87A to Rs. 2500/- for individuals having total income (taxable income) up to Rs. 3.5 lakhs.

The effect of reduced rebate 87A would be as under: 
 
Taxable Income
AY 2017-18
AY 2018-19
Rs. 3,50,000/-
10000/-
5000/-
Less: Rebate u/s 87A
5000/-
2500/-
Net Tax Payable
5000/-
2500/-

The effect of reduction in Rebate on various income groups would be as under:

Total Income (Rs.)
Income Tax
Rebate u/s 87A
Net Tax
Rs. 300000/-
2500/-
2500/-
Nil
Rs. 350000/-
5000/-
2500/-
2500/-
Rs. 400000/-
7500/-
Nil
7500/-
Rs. 500000/-
12500/-
Nil
12500/-

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