Budget 2013: Are you eligible for Rs 2000 Tax Rebate under Sec 87A?
Union Budget 2013
The highlight of budget 2013 for common man was the Tax Rebate of Rs 2,000 for people with income of less than Rs 5 lakhs. This has been made possible by inserting a new section 87A in the Income Tax Act of 1961. I posted the Income Tax calculator for FY 2013-14 and received a lot of queries regarding the Rs. 2,000 tax rebate.
Download the Excel based Income Tax Calculator India for FY 2020-21 (AY 2021-22). This compares…
80 C – Investment in Life Insurance, ELSS, Tax Saving Fixed Deposit, EPF/ VPF Contribution, PPF, NSC, Housing Loan Principal Repayment, Tuition Fee for your children, etc.
80CCC – Deduction in respect of Payment of premium for annuity plan of LIC or any other insurer
80CCD – Contribution made by Central government Employees in his pension account to the extent of 10% of his salary.
The maximum total tax exemption from all the above three sections 80C, 80CCC and 80CCD shall not exceed Rs 1 lakh.
80D – Medical Insurance Premium for self and family members. The maximum exemption is Rs 15,000 (Rs. 20,000 if senior citizen). There is additional Rs 15,000 exemption for medical insurance premium of parents (father/ mother or both). This exemption is Rs 20,000 in case parents are senior citizens.
80DD – Deduction in respect of maintenance including medical treatment of dependent who is a person with disability. Maximum deduction Rs. 100,000/- in case of severe disability (more than 80%) and Rs. 50,000/- in other cases.
80DDB – Deduction up to Rs. 40,000 (Rs. 60,000 for Senior Citizens) for expenditure actually incurred on self or dependent relative for medical treatment of specified disease or ailment.
80E – Deduction of interest of Education Loan
80G – Deduction for donation to certain charitable funds, charitable institutions, etc.
80GGA – Deduction in respect of certain donations for scientific research or rural development
80GGC – Deduction in respect of contributions given by any person to political parties
80GG – For paying rent in case you do not receive HRA.
80U – Deduction of Rs. 50,000 (Rs 1,00,000 in case of severe disability) to an individual who suffers from physical disability.
An Example:
If you have a gross income of Rs 6.5 Lakh and invest 1 Lakh in 80C exemption. Also you pay Rs. 50,000 for education Loan interest exemption under sec 80E.
Your taxable income comes to Rs 5 lakhs. So you would be eligible for Rs. 2,000 Tax Rebate under Sec 87A.
In case you have any queries please do let us know through comments.
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Amit
Hi Readers! I am Amit, the mind behind Apnaplan.com
I am MBA from NITIE, Mumbai and BIT from Delhi University.
This blog is my online diary where I write about my tryst with my investment decisions. In the 400+ posts on this blog you will find articles on Personal Financial Planning, Investments, Retirement Planning, Insurance, Loans, Fixed Deposits, Provident Funds, Stock Markets, Gold, Silver, Real Estate Investment, Credit Cards, Credit Score, Taxation, Inheritance Planning and Reviews on various Financial Products.
Pls clarify rebate u/s 87A should only be claimed while filing the return or employer should allow the deduction while calculating the tax liability of an employee
Employer too should use Section 87A to compute tax paid by employee. The TDS from salary should be deducted on this basis!
Can I get I T rebate under Sec-80C on Annual Charge, Development fees and admission fee
The tax deduction is on tuition fee only
I nitin Sharma, having gross income 6.5 lac, i want to ask that will i get rebate u/s 87a or not,
As explained in the example if your taxable income after all deductions is less than Rs 5 lakh you would be eligible for rebate u/s 87A
Hi Amit thanks for your wonderful guide 'how to save tax 2015'. Kindly clarify my doubt on NSC. You have written under good points- The interest accrued for NSC qualifies for sec 80C deduction in subsequent years.and under bad points- The interest earned is taxable, These contra views confusing me. Kindly elaborate.
Thanks and regards.
GS Negi
If you earn Rs 100 as interest on your NSC deposit, this would be added to your income and taxed accordingly. However this Rs 100 would also qualify for deduction u/s 80C. Both are different things and are not contradictory.
let me know in case you need further clarification.
As per previous year 2013 u/s 87A exemption of Rs. 2000/- retained or
not in this year of 2014
It's still there for fy 2014-15
Respected sir
I am the Bank employee. I have Reimbursed medical bill for knee replacement of my wife .Amt is Rs 198379/-
please give suggestion for not to pay I tax on above medical bill
Thanking you
My gross total income for AY 2014-15 is Rs 6,02,676/-. After deduction under chapter VI A, the total/taxable income comes to Rs 4,92,680/-. Am i eligible to get tax rebate of Rs 2000/-?
The Rebate Rs. 2000/- U/s.87(A) will be deducted after arriving the 3% educational chess or in before arriving the Tax Amount?
please guide, Who is eligible for Tax Rebate?u/s87A with example. thanks
I want to give donate BJP or Congress party so can i save my tax
My net income is 254000 INR
I want to donate 25000 INR
I you suggest invest or block 25000 INR so i block my rupees only for 2 month.
Also my friend have Q. can he show both house rent U/S 10 and house loan U/C VI A if he stay in different location but he has own house and his running home loan.
Please reply / Thanks in advance
Sachin
Ankleshwar
View Comments
Pls clarify rebate u/s 87A should only be claimed while filing the return or employer should allow the deduction while calculating the tax liability of an employee
Employer too should use Section 87A to compute tax paid by employee. The TDS from salary should be deducted on this basis!
Can I get I T rebate under Sec-80C on Annual Charge, Development fees and admission fee
The tax deduction is on tuition fee only
I nitin Sharma, having gross income 6.5 lac, i want to ask that will i get rebate u/s 87a or not,
As explained in the example if your taxable income after all deductions is less than Rs 5 lakh you would be eligible for rebate u/s 87A
Hi Amit thanks for your wonderful guide 'how to save tax 2015'. Kindly clarify my doubt on NSC. You have written under good points- The interest accrued for NSC qualifies for sec 80C deduction in subsequent years.and under bad points- The interest earned is taxable, These contra views confusing me. Kindly elaborate.
Thanks and regards.
GS Negi
If you earn Rs 100 as interest on your NSC deposit, this would be added to your income and taxed accordingly. However this Rs 100 would also qualify for deduction u/s 80C. Both are different things and are not contradictory.
let me know in case you need further clarification.
As per previous year 2013 u/s 87A exemption of Rs. 2000/- retained or
not in this year of 2014
It's still there for fy 2014-15
Respected sir
I am the Bank employee. I have Reimbursed medical bill for knee replacement of my wife .Amt is Rs 198379/-
please give suggestion for not to pay I tax on above medical bill
Thanking you
My gross total income for AY 2014-15 is Rs 6,02,676/-. After deduction under chapter VI A, the total/taxable income comes to Rs 4,92,680/-. Am i eligible to get tax rebate of Rs 2000/-?
The Rebate Rs. 2000/- U/s.87(A) will be deducted after arriving the 3% educational chess or in before arriving the Tax Amount?
please guide, Who is eligible for Tax Rebate?u/s87A with example. thanks
I want to give donate BJP or Congress party so can i save my tax
My net income is 254000 INR
I want to donate 25000 INR
I you suggest invest or block 25000 INR so i block my rupees only for 2 month.
Also my friend have Q. can he show both house rent U/S 10 and house loan U/C VI A if he stay in different location but he has own house and his running home loan.
Please reply / Thanks in advance
Sachin
Ankleshwar