How to calucate tax rebate u/s 87a?

Page no : 2

Nikhil Kaushik (Fellow CA) (85758 Points)
Replied 04 January 2014

dear Nilesh,

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

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Shivani (Learner) (1881 Points)
Replied 15 January 2014

Dear Ankush

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

shivani

Nikhil Kaushik (Fellow CA) (85758 Points)
Replied 15 January 2014

Dear Shivani,

please refer this link from incometax website

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

Ankush Garg (Service) (27 Points)
Replied 16 January 2014

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:

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

pavithra.k (articled assistant) (50 Points)
Replied 21 January 2014

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

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Nikhil Kaushik (Fellow CA) (85758 Points)
Replied 21 January 2014

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

Shreyans Sanghvi (Student CA Final ) (21 Points)
Replied 21 January 2014

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

Mohammad Zeban Quadri (Student) (55 Points)
Replied 30 January 2014

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

Mohammad Zeban Quadri (Student) (55 Points)
Replied 30 January 2014

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

Rohan Jain (Chartered Accountant) (24 Points)
Replied 02 February 2014

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

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CA Pooja Sharma (Chartered Accountant) (192 Points)
Replied 04 February 2014

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.

CA Shravan Kumar (Chartered Accountant) (52 Points)
Replied 14 February 2014

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.

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