Step by Step Guide to Claim Income Tax Rebate u/s 87A

Every informed taxpayer enjoys the advantage of utilizing relaxations from the government to the fullest. Concerning the same, many people have doubts about how to claim an income tax rebate under Section 87A. This rebate falls under the income tax provision wherein a taxpayer can reduce his tax liability if his net income is up to 5 Lakhs per annum. It is essential to understand the process of claiming this rebate with utmost accuracy. Here is the ultimate guide for taxpayers to claim the rebate!

Avail Tax Rebate Under Section 87A: A Few Simple Steps

Taxes can be confusing for new taxpayers and the ones who have never involved themselves directly in the process. By following these steps, anyone can claim a tax rebate under section 87A. And if there is any difficulty, consult a professional or firm that offers these services.

Tally The Eligibility Criteria

Any earning resident individual whose net annual income is up to 5 lakhs is eligible for a tax rebate. However, his income after all the deductions that fall under Chapter VI-A must be under 3.5 lakhs. One must justify these eligibility criteria before considering the rebate.

Calculate The Gross Total Income

If one has different sources of income, it is essential to show them legally in the tax files and calculate the gross income. If it exceeds the tax slab on which the rebate is applicable, he cannot apply for the rebate.

Reduce The Tax Deductions

Chapter VI-A in the tax regime lays various deductions under Section 80D, 80C, 80E, etc. The rebate under section 87A applies to the total income after all these deductions. The amount has to be less than 3.5 lakhs after all deductions. However, the cess is applicable after the rebate.

File Income Tax Return

One cannot claim a rebate without an updated ITR file. So, before claiming the rebate, one should apply for their income tax return. While the online portals have made it easier for taxpayers to submit ITR files, most people prefer taking the help of a professional to do the job. It ensures there is no error in the file.

Make the Rebate Claim Application

After the ITR file is under process, one can claim the rebate. For this, it is essential to calculate the exact amount, and this process is a little complicated. So, the best one can do is utilize an accountant’s experience or a service provider who covers all these services.

A Few Measures To Take Before Claiming Rebate u/s 87A

First, one has to ensure that his ITR file qualifies for rebate under Section 87A. Also, there are a few aspects to consider before making the final claim. In case of any queries or difficulties, check more here.

  • One can apply for the rebate if he is a resident individual in India. NRIs are not eligible for this rebate.
  • Senior citizens below the age of 80 are also eligible for this rebate. However, people above 80 do not qualify for it even if they are earning members.
  • The rebate is imposed on the total tax before applying the 4% cess of health and education.
  • If a taxpayer does not have any information or idea about how to calculate the rebate, or if he is an amateur, taking the help of a reliable service provider is helpful.

Tax rebate under section 87A is active in both new and old tax regimes. One must follow these tips and claim the amount every financial year. People should be careful with their taxes to never miss out on these small concessions, which saves some money.