Rebate of up to Rs 2,000 for resident individuals having total income of up to Rs 5 lakh [Section 87A] :

In order to provide tax relief to the individual tax payers who are in the 10% tax slab , section 87A has been inserted to provide a rebate from the tax payable by an assessee, being an individual resident in India, whose total income does not exceed Rs 5,00,000.

(i) The rebate shall be equal to the amount of income-tax payable on the total income for any assessment year or an amount of Rs 2,000, whichever is less.

(ii) Consequently, any individual having total income up to Rs 2,70,000 will not be required to pay any tax. Further, every individual having total income Rs 2,70,000 or above but not exceeding Rs 5,00,000 shall get a tax relief of Rs 2,000. In effect, the rebate would be the tax payable or Rs 2,000, whichever is less.

(iii) Further, the aggregate amount of rebate under section 87A shall not exceed the amount of income-tax (as computed before allowing such rebate) on the total income of the assessee with which he is chargeable for any assessment year.