Rebate 87A Finance Act 2019 [Updated] A.Y.2020-21 with Examples

A resident individual can claim a rebate from income-tax under section 87A. Currently, this rebate is available only if his total income does not exceed Rs.3,50,000.

The amount of rebate for the assessment year 2019-20 is limited to Rs.2,500.

From the assessment year 2020-21, this rebate will be available if total income of the resident individual is Rs. 5,00,000 (or less).

The quantum of maximum rebate will be Rs.12,500.

The following table summaries provisions of section 87A before and after this amendment.

Rebate 87A Table (From A.Y.  2014-15 to A.Y.2020-21)

Different yearsTotal income should not exceed the amount given belowAmount of rebate u/s 87A
A.Y. 2014-15 to 2016-17Rs.5,00,000100% of income-tax or Rs.2,000, whichever is less
A.Y.2017-18Rs.5,00,000100% of income-tax or Rs.5,000, whichever is less
A.Y.2018-19 and A.Y.2019-20Rs.3,50,000100% of income-tax or Rs.2,500, whichever is less
A.Y.2020-21 onwardsRs.5,00,000100% of income-tax or Rs.12,500 whichever is less

Taxable income or total income (i.e. gross total income – deduction under 80C to 80U)

A.Y.2020-21 is Rs.5,00,000 (Situation 1)

A.Y. 5,10,000 (Situation 2)

Tax liability of X  is calculation in different cases – age of X at any time during the previous year 2019-20 is

40 Years (Case 1), 60 Years (Case 2) or 80 Years (Case 3)

You can also use income tax calculator for A.Y.2020-21 here.

ParticularsAge of X 40 YearsAge of X 60 YearsAge of X 80 Years
Situation 1Situation 2Situation 1Situation 2Situation 1Situation 2
Total Income5,00,0005,10,0005,00,0005,10,0005,00,0005,10,000
Income-tax on total income12,50014,50010,00012,000Nil2,000
Less: Rebate u/s 87A12,500Nil10,000NilNilNil
Add: Health and education cessNil580Nil480Nil80
Tax LiabilityNil15,080Nil12,480Nil2,080

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