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The Indian tax laws have provisions under the Section 87A, Income Tax Act to lighten the burden of tax liabilities of taxpayers. One of these provisions is Tax rebate . These laws are very helpful to the Indian residents, especially for the low income class individuals. The government provides these generally in the form of rebates, tax exemptions, etc.
The Section 87A is a provision under The Income Tax Act to marginally reduce the payable tax amount of individuals. To better understand about the rebate in the Section 87A, firstly we will learn about some of the terms used in taxation. These are Tax Refund, Tax Rebate, Tax Exemption, and Taxable Income.
A kind of tax relief given to individuals depending on the amount of their total income is Tax rebate. A rebate is calculated by deducting the relief amount from the total income and then the tax is taken off from the deducted amount.
When the amount paid tax by the taxpayer is more than the actual tax amount to be paid, In that case the extra amount is returned to the taxpayer. This is tax refund.
Similarly, Tax exemption is the money related exclusion which reduces the taxable income.
This is base of the total income amount of an individual upon which the income tax system imposes the tax.
Subsequently, The Income Tax Laws of India provides specific reliefs or rebates to reduce the tax liabilities of taxpayers after the formation of Section 87A.
Rebate under Section 87 A provides reduction in the payable tax amount. The rebate is either less than the 100% of the income tax liability or Rs. 2500 whichever is less. This amount is for incomes up to 2.5 lakhs and no rebate is available to individuals having income of more than 3 lakhs according to the current law which will be increased to 5 lakhs in the next financial year.
The Income tax is a way to reduce to tax amount. Individuals that lie under the following categories can take benefit from it:
These rules are under the Financial Year 2019-20 or the Assessment year 2020-21;
These rules are under the Financial Year 2017-18 or the Assessment year 2018-19;
Income Tax Act was formed by the Government of India to formulate laws, administer, collect and recover income tax. In other words we can also say that this act was made to consolidate and amend rules and laws related to income tax and super tax. This is a citation from Act 43 of 1961, enacted by The Parliament of India. The date of commencement of this act was 1st April 1962 and is still in force.
The Government of India holds meeting to present the finance budget of every year in the month of February. This meeting is held to bring amendments in the income tax act 1961 and the tax slab rates.
The Income Tax laws provide individual taxpayers with methods to save their taxes. The taxpayer can save money by using these income tax saving tools. One of them is tax rebates given under Section 87 A, Income Tax Act 1961. Furthermore, a rebate is a supportive tool which provides with marginally lower payment of taxes by the taxpayers.
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