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What Is 87A in the Income Tax Act?

Avail tax rebates! Discover Section 87A of the Income Tax Act, its provisions, and eligibility criteria for tax relief.

  • 12 Mar 2024
  • 2 min read
  • 85 views

Section 87A of the Income Tax Act (ITA), 1961, provides an opportunity for taxpayers to receive a rebate on their income tax liability. It's important to understand the details of this section in order to make the most of the tax benefits available. Let’s look closely at Section 87A and what’s in it for you.

87A in Income Tax

 

Section 87A of the ITA provides a rebate on your tax liability. To be eligible for a rebate under Section 87A, your taxable income (after taking deductions into account) must fall below a threshold. The threshold for 87 A rebate varies depending on the tax system you opt for:

 

  • Under the old tax regime: If your income is up to INR 5 lakh, you can receive a deduction of INR 12,500.
  • Under the new tax regime: If your income is up to INR 7 lakh, you can receive a rebate of INR 25,000.

 

Do note that NRIs (Non-Resident Indians), HUFs (Hindu Undivided Families), and firms are ineligible for a tax rebate under Section 87A of the ITA.

Also read:

Conclusion

Section 87A of the ITA can significantly reduce your tax burden. You must also explore other ways to avail of tax rebates. For instance, investing in health insurance plan can help you get a tax rebate under Section 80D.

 

Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the topic featured in the article. It is advised to verify the currency and relevance of the data and information before taking any major steps. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.

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