Under Section 87 A of Income Tax Act 1961, every INDIVIDUAL whose Income is below Rs. 5,00,000/ gets a rebate of Rs. 2,000/ from Total Tax payable.
This New section was introduced by Mr Chidambaram during his Budget Speech 2013.
This is applicable to Resident Individuals (not for HUF and NRI) whose Total Taxable Income (after Deductions under Chapter VI-A) does not exceed Rs. 5,00,000/ for the Financial Year 2013-14.
This is also beneficial for senior citizens of age 60 to 79 also.
After arriving at the Total Tax Payable, one can deduct Rs. 2,000/ u/s 87A.
When Tax payable is less than RS.2,000/ the rebate is limited to the amount of Tax payable.
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