Is rebate u/s 87a available on winning income?

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Prashant R. Karia (Querist)
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30 April 2014 Is Rebate u/s 87A Available on Winning income?

What will be the tax if only income of individual is 300000 from winnings of lotteries

CA Deven

CA Deven (Expert)
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30 April 2014 28900..........................................................................87A is availiable

Prashant R. Karia

Prashant R. Karia (Querist)
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30 April 2014 But if Even basic exemption is not available on winnings income then how 87A can be claimed. Dear Sir basic exemption is not available on winnings income. hence tax should be 92700. and if rebate available then 90640.

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Nikhil Kaushik

Nikhil Kaushik (Expert)
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30 April 2014 Dear Prashant, 87A is available as long as your total income (which includes lottery income) is not more than Rs 500000/-. availability of 87A comes post computation of tax liability. 115BB is restricted to the computation of tax on total income and 87A applies thereafter.

Therefore, total tax liability shall be Rs 90000. less Rs 2000 rebate under 87A. Net tax liability Rs 88000 plus 3% cess.

Total tax liability 90640.

Prashant R. Karia

Prashant R. Karia (Querist)
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30 April 2014 But logic of not giving benefit of basic exemption should be also be work in case of rebate u/s 87A.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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30 April 2014 why so? 87A is based on total income. It has nothing to with the tax liability. Had there been the desire of legislature to provide for same logic, it should have worded 87A similar to 115bb...

If a single logic is to be applied to everything in tax, then then there wont be different tax rates, rebates, exemptions, additions etc etc...something similar to Banking transaction tax that BJP wanted to explore as an alternative to Income-tax.