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FY 2017-18

For FY 2017-18, the Finance Minister has provided a maximum Rebate of Rs. 2,500 under Section 87A.

Section 87A rebate provides for income  tax rebate to individuals earning income below the specified limit. It is being provided to reduce the tax burden of lower income bracket.

Who can claim rebate under section 87A for FY 2017-18?

Income Tax Rebate U/s. 87a

The rebate can be claimed if you satisfy both these conditions:

  • You are a RESIDENT INDIVIDUAL.
  • Your Total Income Less Deductions (under Section 80) is equal to or less than Rs 3,50,000

If both the above conditions are satisfied, rebate of Rs 2,500 will be available under Section 87A. The rebate is limited to Rs 2,500. Which means if the total tax payable is lower than Rs 2,500, such lower amount of tax will be the rebate under section 87A. This rebate is applied on total tax before adding Education Cess(3%). This rebate is also available to Senior Citizens who are 60 years old but less than 80 years old.

Here are a few examples of this Rebate allowed to Resident Individuals including Senior Citizens:

Total Income Tax payable before cess Rebate u/s 87A Tax Payable + 3% Cess
2,65,000 750 750 0
2,70,000  1000  1000 0
3,00,000 2,500 2,500 0
 3,50,000 5,000  2,500  2,500+75

Q: How can I claim section 87A rebate in ClearTax Software?

A: ClearTax’s e-filing software automatically gives rebate while e-filing if you are eligible.

FY 2016-17

Keeping in mind the tax burden of lower income bracket, the Finance Minister has provided a Rebate under Section 87A for Financial Year 2016-17.

Who can claim rebate under section 87A in FY 2016-17?

The rebate shall be available if you satisfy both these conditions:

  • You are a RESIDENT INDIVIDUAL.
  • Your Total Income Less Deductions (under Section 80) is equal to or less than Rs 5,00,000

If both the above conditions are satisfied, rebate of Rs 5,000 will be available under Section 87A. The rebate is limited to Rs 5,000. Which means if the total tax payable is lower than Rs 5,000, such lower amount of tax will be the rebate under section 87A. This rebate is applied on total tax before adding Education Cess(3%). This rebate is also available to Senior Citizens who are 60 years old but less than 80 years old.

Here are a few examples of this Rebate allowed to Resident Individuals including Senior Citizens:

Total Income Tax payable before cess Rebate u/s 87A Tax Payable + 3% Cess
2,65,000 1,500 1,500 0
2,70,000 2,000 2,000 0
4,50,000 20,000 5,000 15,000 + 450
5,00,000 25,000 5,000 20,000 + 600

Q: How can I claim section 87A rebate in ClearTax Software?

A: ClearTax’s e-filing software automatically gives rebate while e-filing if you are eligible.

 Q: Can NRIs claim rebate under section 87A?
A: No, this rebate is only allowed for Residents.
Q: Can this rebate be claimed by anyone?
A: This rebate is only allowed to individuals. HUFs or firms, or companies cannot claim this rebate.

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