Effective Rebate under Section 87A of Income-Tax Applicable to New Regime in FY 2023-24
Explore the amendments to Section 87A of the Income-Tax Act, effective from April 1, 2024, providing valuable insights into the rebate available to individual residents in India. Delve into the Finance Act 2023’s proviso and discover the nuanced changes in the chargeability of tax under sub-section (1A) of Section 115BAC for a comprehensive understanding of the revised income tax structure under new regime.
Section 87A Amendment
As of April 1, 2024, an individual resident in India with a total income not exceeding Rs.5 Lakh is entitled to a deduction equal to 100% of the income tax or Rs.12,500, whichever is less. The Finance Act 2023 introduces a proviso for those whose total income is chargeable under sub-section (1A) of Section 115BAC (new regime), with varying deductions based on income brackets.
Provisions of Rebate for Different Income Levels under New Regime
(a) For total income up to Rs.7 Lakh, a deduction equal to 100% of the income tax or Rs.25,000, whichever is less, is applicable.
(b) If the total income exceeds Rs.7 Lakh, the deduction will be the amount equal to the amount by which the income-tax payable on such total income is in excess of the amount by which the total income exceeds Rs. 7 lakhs.
Chargeability of Tax under Sub-Section (1A) of Section 115BAC (New Regime)
The revised tax rates applicable from April 1, 2024, categorize income into different slabs with corresponding tax rates:
| Income | Rate of Tax |
| Up to Rs.3,00,000 | Nil |
| Rs.3,00,001 to Rs.6,00,000 | 5% |
| Rs.6,00,001 to Rs.9,00,000 | 10% |
| Rs.9,00,001 to Rs.12,00,000 | 15% |
| Rs.12,00,001 to Rs.15,00,000 | 20% |
| Above Rs.15,00,000 | 30% |
Related FAQs
Question 1: Can a non-resident claim rebate under section 87A?
Answer: No, rebate under section 87A is exclusively available to resident individuals, making it unavailable for non-residents.
Question 2: Can a Partnership firm or HUF claim rebate under section 87A?
Answer: No, rebate under section 87A is limited to resident individuals, excluding entities such as Partnership firms or HUF from eligibility.
Conclusion
Stay informed about the latest amendments to Section 87A and the revised tax structure under sub-section (1A) of Section 115BAC. These changes aim to provide individuals with enhanced benefits based on their income levels, fostering a more inclusive and equitable taxation system.
To Access the amended Section 87A in the I-T portal CLICK HERE
To Know How to Escape from TDS deduction from Salary Income CLICK HERE
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