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 1^st 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/-