A new section 87A by Finance bill 2013 has been introduced for Income Tax Deduction of Rs. 2000/- for Assessment Year 2014-15. This rebate can be availed Tax payer/Assessee under section 87A.It is necessary to read clauses 19 and 20 of the bill to make it more clear-
Clauses 19 and 20 of the Bill seek to amend section 87 and insert a new section 87A in the Income-tax Act relating to rebate of income-tax in case of certain individuals.
The proposed new section 87A seeks to provide that an assessee, being an individual resident in India, whose total income does not exceed five Lakhs, shall be entitled to a deduction( U/s 10,16,80C and under chapter VI A), from the amount of income on his total income with which he is chargeable for any assessment year, of an amount equal to hundred per cent. of such income-tax or an amount of two thousand rupees, whichever is less.
Consequential amendments have been proposed in section 87, so as to provide reference to proposed new section 87A.
Points of consideration….
These amendments will take effect from 1st April, 2014 and will, accordingly, apply in relation to the assessment year 2014-15 and subsequent assessment years.
Rebate is available only to individuals
If your tax is less than 2000/- you will not get refund.
No rebate to Non Resident.