How to save Income Tax u/s Section 87A if taxable Income of Individual is upto 5 Lakhs?
By gkkedia Dt. February 14th, 2020
Section 87A of Income-tax Act, 1961 gives maximum rebate in Income-tax of Individuals and HUF of Rs 12,500 to those Assessees whose net taxable income does not exceed Rs. 5 lakh in a year.
It means, eligible Assessee has to file the ITR and has to calculate Income-tax liability and thereafter rebate has to be claimed.
For example, if an assessee has Rs 5,50,000 gross taxable income and has invested Rs. 1,50,000 under Section 80C, then his net taxable income is Rs.4,00,000. Income tax on Rs 4,00,000 will come to Rs. 7,500 @ 5%. Under such situations, he will claim a rebate of Rs. 7,500 under Section 87A and is not required to pay any Income-tax.
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