How to calucate tax rebate u/s 87a?

dear Nilesh,

Please refer https://www.incometaxindiapr.gov.in/incometaxindiacr/contents/forms2010/pamphets/Individual_HUF_2014_15.htm

Dear Ankush

Can you please provide relevant notification or circular which says that rebate is to be provided before cesses?

shivani

Dear Shivani,

please refer this link from incometax website

Dear Shivani

Ed. Cess is added on tax payable calculated after allowing all deductions, rebate and relief. No  circular / notification is needed for that.

you may refer the link given by Nikhil:

Dear Nikil,

 your reply to shivani has a clarification.

the amount of 2000/- is deductible before calculating education cess and the calculation is done as below

Total tax                        60000

Less:Rebate u/s87 A        2000     

Tax                                58000

Edu cess @ 3%                1740

Total tax payable             59740

Yes Pavithra, it is so..we are saying the same thing :)

Should agricultural income be considered while calculating the limit of 500000 to claim rebate u/s 87A?

If your Taxable income upto Rs.5 Lakh so you are applicable for this Rebate u/s. 87A

If your Taxable income upto Rs.5 Lakh so you are applicable for this Rebate u/s. 87A

Dear Nikhil & Shivani,

In the above example tax will be calculated as follows:

Tax on Salary Income             10000
Tax on LTCG                           20000
Tax on Lottery                        30000  
Total Tax                                 60000
Less Rebate under 87A            2000
                                                58000

Add: Education Cess @ 2%       1160

Add: SHE @ 1%                           580

Total Tax Liability                       59740

As this section (87A) is applicable from A/y 2014-15 & onwards , you may claim rebate under this section for the income earned in F/y 2013.14.

1) As per the clarrification given by Income Tax debartment and as per Sec. 87A rebate of Rs. 2000 or 100% of tax (whichever is less) shall be deducted from the tax amount before calculating the education cess.

2) As per Sec 115BB lottery income shall be taxed at 30% + E.C. 3%. Since Sec. 115BB is specific in nature and Sec. 87A is general in nature Sec. 115BB overrides Sec.87A and Rebate u/s 87A is not available for lottery income.

I stand to be corrected if wrong.

YES