Section 87A ITA 1961 provides REBATE for INDIVIDUAL TAXPAYERS whose TAXABLE INCOME does not exceed:
Answer & Solution
Correct answer: D.
1. Section 87A Income Tax Act 1961: REBATE for INDIVIDUAL taxpayers whose total income does not exceed certain limits:
2. OLD REGIME: Rebate of up to Rs 12,500 for taxable income up to Rs 5,00,000 — effectively zero tax up to Rs 5 lakh.
3. NEW REGIME (introduced Budget 2020, modified Budget 2023):
4. (i) Rebate up to Rs 25,000 for taxable income up to Rs 7,00,000;
5. (ii) Marginal relief for income just above Rs 7 lakh.
6. From AY 2025-26 (Budget 2024 changes): rebate up to Rs 25,000 for income up to Rs 7,00,000.
7. Section 87A rebate is from INCOME TAX (after computation), not from total income.
8. Hence option A is correct (with the 2023 update).
_Source: CS Executive Paper 4 Tax Laws (ICSI BoS) + Income Tax Act 1961 + CGST Act 2017 — Income Tax Act 1961, Section 87A_
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