Ankit is correct 87a will be available as it only require total income not exceeding 5 lakh . even for special rated income 87a will be available.

In this case according to my opinion deduction u/s 87a shall not be granted.

Because the intention of legislature is clear to not allow any benefit to the person earning income from lotteries thats why Basic exemption limit is also not available.

Originally posted by : vipin patole
	In this case according to my opinion deduction u/s 87a shall not be granted. Because the intention of legislature is clear to not allow any benefit to the person earning income from lotteries thats why Basic exemption limit is also not available. Also section 58(4) specifically disallow to claim any deduction under the provisions of the act. Sec 54(4) In the case of an assessee having income chargeable under the head "Income from other sources", no deduction in respect of any expenditure or allowance in connection with such income shall be allowed under any provision of this Act in computing the income by way of any winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or from gambling or betting of any form or nature, whatsoever

dear , 87A is not a deduction , it is a REBATE provided to small tax payer regardless to what source their income belong .

54(4) disallow any expendtue IN CONNECTION WITH   winnings from lotteries, crossword puzzles, races etc making sure that they are fully taxed .

BUT STILL 54(4) DID NOT COVER REBATE U/S 87A as it is allowed regardless source of income.

i have attached the  Memorandum - Union Budget 2013 so that you can understand the true intention of legislature behind 87A. 

Hi Friends

Everytime i put a question on CA Club Forums there is a riot

I always get two conflicting opinions and i am left wondering what to do.

Section 87A language doesnt seem to restrict rebate on lottery income as it talks about only total income and lottery income is also a part of total income. 87A is about providing rebate from income tax calculated and the income tax calculated can be the sum total of lottery income and slab income.

However, if we go into the spirit behind introducing section 87A when P Chidambaram introduced in Budget few years back. He talked about 10% inflation and providing relief to the first income tax slab assesses which was then rs. 200000, so he gave rebate of 2000 (200000 * 10%) to compensate them for the inflation.

His intention while introducing the section 87A was slab income but in framing of section 87A it talks only about total income and makes no mention of excluding casual incomes like lottery, hence the confusion.

If you go by the letter of section 87A, Mr. X should get tax rebate of Rs. 2000 but if anyone heard P Chidambaram Budget speech that day, you know thats not perhaps he intended.

Regards

Shivani

shivaniadream @ gmail.com

I agree with Ankit. 87A is applicable. Whatever may be the intention of the section, it gets automatically calculated in the java ITR 2 utility, So I guess, we don't really have a choice.

Dear Ankit

I also support your answer that we can claim rebate u/s 87A of the Act even in case of lottery income which is chargeable at a flat rate. There is no confusion; the provision clearly says total income.  

Nowhere in the provision mentioned that it is chargeable only to Individual charged under tax slab of 10%, it only talks about total income.

Further in your case SHIVANI you can claim rebate u/s 87A of the Act.

If any contradictory view please share your views with some text, only saying not applicable creates confusion to the queries.

I also aree with Ankit and Madhvi 87a wil be avilable . 

java utility is providing rebate even if lottory income or some special rated income like capital gain is earned . 

the thing relevant is that Total income should not exceed 500000.

Mr. Ankit agreed with regarding deduction and rebate that was a misinterpretation on my side. BUT if you read the memorandum carefully you will find sentence "With a view to provide tax relief to the individual tax payers who are in lower income bracket" so specifically words LOWER INCOME BRACKET has been used that represent the benefit of sec 87a is available to only those individuals having income in lower brackets. However for lottery income there is no such lower bracket. Hence the benefit cannot be availed. 

HOW COME HE IS ELIGIBLE FOR 87A....HE IS TAXED FLAT 30% ON LOTTERY WINNING...AS PER QUESTION RAISED...ITS HIS ONLY INCOME....HE IS BELOW TAXABLE....QUESTION OF 87A DOES NOT ARISE HERE SINCE THERE IS NO LIABILITY TO PAY TAX