What is the 87A rebate for senior citizens?
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The Section 87A rebate in India is an income tax benefit available to resident individuals (including eligible senior citizens aged 60-79) to reduce their tax liability to nil, provided their total taxable income does not exceed a specified threshold.
Can senior citizens claim 87A deduction?
Senior citizens above 60 years and up to 80 years of age are eligible to claim rebates under Section 87A. Super senior citizens above 80 years are not eligible to claim the rebate. The rebate is applicable to the total tax amount before applying the 4% health and education cess.
Who is eligible for an 87A rebate?
What is rebate under section 87A for F.Y 2025-26 and who can claim it? An individual who is resident in India and whose total income does not exceed Rs. 5,00,000 is entitled to claim rebate under section 87A. Rebate under section 87A is available in the form of deduction from the tax liability.
What are some common mistakes while claiming 87A?
Q9: Are there any common mistakes to avoid while claiming Section 87A? Common mistakes include underreporting income, failing to disclose all income sources, or missing eligible deductions. Ensure your total taxable income remains under ₹5 lakh to qualify for the full rebate.
What is the maximum amount of rebate US 87A?
The maximum rebate is Rs. 12,500 under the old tax regime and Rs. 60,000 under the new tax regime for FY 2025-26 (AY 2026-27). If your calculated tax liability is less than the maximum rebate amount, your tax liability will be reduced to zero.
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Is the 87A rebate available to all taxpayers?
Eligibility Criteria for Rebate
Only resident individuals are eligible to avail rebate under this section. Rebate under Section 87A is available to taxpayers whose income does not exceed: Rs. 7 lakh under the new tax regime and. Rs. 5 lakh under the old regime.
Is there any exemption for senior citizens in the new tax regime?
In the old tax regime , the basic exemption limit for senior citizens is Rs. 3,00,000/- and for super senior citizens, it is Rs. 5,00,000/-. In the new tax regime, no income tax is payable upto the total income of Rs. 7 lakh.
What income is considered for section 87A?
If an individual earns ₹12 lakh as normal income, ₹60,000 as short-term capital gains, and ₹1 lakh as long-term capital gains, they qualify for the Section 87A rebate on normal income. The long-term capital gain is fully exempt as it is below ₹1.25 lakh.
Why am I not getting a rebate under 87A?
New tax regime: “The ITR utility does not allow automatic 87A rebate when the total income exceeds Rs 7 lakh includes special rate income like STCG under Section 111A or LTCG under Section 112A. The rebate can only be claimed if the slab-rate income alone is within the Rs 7 lakh limit.
What raises red flags with the IRS?
Owning a small business such as auto dealership, a restaurant, a beauty salon, a car service or cannabis dispensary is an IRS red flag, as they typically have many cash transactions. Red flags are also raised on outliers – businesses with margins that are too low or too high.
How do I claim 87A while filing ITR?
Claim the Rebate: When you fill out your ITR, you will come across a section where you can claim Section 87A rebate. Enter the amount of rebate you are eligible for, which is ₹12,500 if your taxable income is below ₹5 lakh.
Who has to file 10iea in income tax?
It is mandatory to submit Form 10-IEA for Opt out or Re-entering in to New Tax regime by Individuals, HUF, AOP (other than co-operative societies),BOI & AJP who have income from business or profession.
What is the tax deduction for seniors over 65?
The new tax deduction for seniors 65 and older allows you to reduce your taxable income by up to $6,000. Taking the new senior deduction can mean less tax or potentially an even bigger tax refund when you file your return.
What is the new limit for senior citizens?
An individual resident who is 60 years or above in age but less than 80 years at any time during the previous year is considered as Senior Citizen for Income Tax purposes. A Super Senior Citizen is an individual resident who is 80 years or above, at any time during the previous year.
Can I appeal if my 87A rebate is denied?
Vasudevan says: “The Circular empowers CPC to issue rectification orders and raise tax demand in cases where 87A rebate has been allowed to the taxpayers. However, the taxpayer receiving such notice, can litigate the matter by filing an appeal before Commissioner of Income-tax (Appeals).
What are the conditions for an 87A tax rebate?
Eligibility Criteria for Section 87A Rebate 2025
Under the new tax regime: income should not exceed ₹12,00,000. Under the old tax regime: income should not exceed ₹5,00,000 after claiming deductions under Sections such as 80C, 80D, or 80G.
What is the 87A rebate glitch?
Rebate under Section 87A of the Income Tax Act
Provides relief to small taxpayers by lowering or eliminating tax liability for modest incomes. Due to technical glitches and incorrect assessment, the Section 87A rebate was mistakenly applied to some special-rate incomes.
Are senior citizens eligible for the 87A rebate?
Senior citizens above the age of 60 years and below the age of 80 can avail rebate u/s 87A. ISuper senior citizens above the age of 80 years do not hold eligibility to claim rebates u/s 87A. The rebate amount will also be lower than the specified limit under Section 87A or the total taxable income prior to tax.
Who is eligible for 87A tax rebate?
This tax rebate gives individuals that earn under ₹12 lakh in a financial year exemption from taxes. However, this is only applicable if you choose the new tax regime. If you are a salaried individual, you also are eligible for a standard deduction of ₹75,000. This increases the limit of tax-exemption to ₹12.75 lakh.
What is the difference between standard deduction and 87A rebate?
Rebate benefits only resident individuals below a specific taxable income threshold. Standard deduction reduces income, while rebate reduces tax. Under the new regime, the combination of standard deduction and rebate ensures zero tax up to ₹12 lakh income.
What is interest rebate for senior citizens in new tax regime?
What is Section 80TTB? Section 80TTB of the Income Tax Act is a special provision created for senior citizens. It allows them to claim a deduction of up to Rs. 50,000 on the interest income they earn.
Is it better to opt for old tax regime or new tax regime?
If your income is ₹25 lakhs, the ideal tax regime depends on your deductions: Go with the old regime if your tax-saving deductions are more than ₹3.75 lakhs. Choose the new regime if your deductions are less than ₹3.75 lakhs.
How to calculate tax under new regime for senior citizens?
Step-by-Step Calculation
- Total Income:
- Deductions: Standard Deduction: ₹50,000. Section 80C: ₹1,50,000. ...
- Taxable Income: Total Income: ₹7,00,000. Total Deductions: ₹2,50,000. ...
- Tax Liability: Up to ₹3,00,000: Nil. ...
- Rebate and Cess: Section 87A Rebate: ₹7,500 (since taxable income is below ₹5 lakh)