How to Claim 87A?

Wondering how to claim 87A?

Rebate under Section 87A of the Income Tax Act provides relief to individual taxpayers by reducing their tax liability. It is available to resident individuals whose total income falls within the specified threshold.

How to Claim 87A Rebate?

Here’s a step-by-step guide on how to claim rebate under Section 87A. Verify whether you meet the eligibility criteria to claim rebate under Section 87A:

• Resident Individual: You must be a resident individual for the relevant assessment year.

• Total Income: Your total income should not exceed the specified threshold limit, which is Rs5,00,000 for FY 2023-24 onwards.

Calculate your tax liability for the financial year after considering all applicable deductions, exemptions, and tax-saving investments. Ensure accuracy in reporting income and deductions to arrive at the correct taxable income.

If your total income is within the threshold limit, you are eligible for a rebate under Section 87A. The rebate amount is the lesser of:

• Rs12,500: The maximum rebate allowed under Section 87A.

• Actual Income Tax Liability: If your tax liability is lower than Rs12,500, the rebate is equal to the tax liability.

While filing your Income Tax Return (ITR), ensure you claim the rebate under Section 87A in the appropriate section of the form. Provide accurate details of income, deductions, and tax liability to claim the rebate correctly.

• Review the details provided in your ITR form to ensure accuracy and completeness. Verify that the rebate under Section 87A has been correctly applied to reduce your tax liability. Once verified, submit the ITR electronically through the Income Tax Department’s e-filing portal.

• After submitting your ITR, the Income Tax Department will process your return and calculate the final tax payable/refundable. If eligible, the rebate amount will be deducted from your tax liability, resulting in reduced tax payable or increased refund.

• Claiming rebate under Section 87A is a straightforward process for eligible taxpayers. By following these steps and accurately reporting your income and deductions, you can maximize tax benefits and reduce your overall tax liability effectively.

Ensure compliance with tax laws and timely filing to avail of the rebate and enjoy tax savings. This is all about how to claim 87A.

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