Hindu Undivided Families cannot take advantage of this rebate. Also, to take advantage of the rebate, you must be a resident of the Income Tax Act. Because, even non-residents do not get its benefit.
If you are a salaried person, especially in job, business or any other profession, you are getting income more than the tax exemption limit, then you will have to pay income tax.
But if you are earning up to Rs 5 lakh annually, then there is a concession in income tax for you. Both the terms are quite simple, but some people may get confused in it. So you don’t need to get confused. Today we will tell you what is income tax rebate, and which people get the benefit of it.
In this it is very important to keep in mind that if your income exceeds Rs 5 lakh, then you will not get this concession under 87A. This clearly means that not everyone gets this concession.
What is Income Tax Rebate?
Tax rebate in simple words means the tax liability which is waived off by the government. According to the rule, if the annual income of a person is up to Rs 5 lakh. That is, the government waives the income tax liability up to Rs 12500. In such a situation, due to this decision, no tax is to be paid on income up to Rs 5 lakh annually. Because the tax on this income limit comes under the category of rebate. That’s why the government forgives him.
Who gets tax exemption?
Actually Hindu Undivided Family (HUF) cannot take advantage of this rebate. Also, to take advantage of the rebate, you must be a resident of the Income Tax Act. Because, even non-residents do not get its benefit. Apart from this, your taxable income should not exceed Rs 5 lakh.
How to get tax exemption on income up to 5 lakhs?
You can understand the mathematics of this in such a way that, with 5 percent tax slab on income from 2.5 to 5 lakhs, tax on taxable income of 5 lakhs will be Rs 12,500. That is, along with income tax rebate of Rs 12,500, tax exemption will be available on earning up to 5 lakhs. Significantly, in the Interim Budget 2019, the tax rebate limit was increased from 2500 to 12500. Under which the government waives the income tax liability up to 12500.
