Finance Bill 2016
Rationalization of limit of rebate in income-tax allowable under Section 87A
The existing provisions of section 87A of Income-tax Act, provide for a rebate of an amount equal to hundred per cent of such income-tax or an amount of two thousand rupees, whichever is less, from the amount of income-tax to an individual resident in India whose total income does not exceed five hundred thousand rupees.
With the objective to provide relief to resident individuals in the lower income slab, it is proposed to amend section 87A so as to increase the maximum amount of rebate available under this provision from existing Rs.2,000 to Rs.5,000.
This amendment will take effect from 1stApril, 2017 and will accordingly apply in relation to assessment year 2017-18 and subsequent assessment years.