Model Calculation of Rs.2000 Rebate in Income Tax Act 2013 as per Section 87A
- Let us assume that Your Gross Income is Rs.400000
- All Deductions and Exemptions is Rs.100000 and Your Total Income after applying all eligible deductions is Rs.3,00,000.
- Hence, Now the Net Taxable Income will become Rs.3,00,000.
- Now, 10% Tax on Rs.1,00,000 (Rs.3,00,000 - Rs.2,00,000) will be Rs.10,000.
- As the Taxable Income is Less than Rs.5,00,000, apply Tax Rebate u/s 87A upto a Max of Rs.2,000.
- Hence Tax is Rs.10,000 - Rs.2,000 = Rs.8,000.
- Add Education Cess, Higher and Secondary Education Cess 3% on Rs.8,000 and Pay the Tax.