87A rebate only if income is less than Rs 5 lakh for AY18

How much tax rebate is available under Section 87 A of the Income Tax Act for assessment years 2017-18 and 2018-19?   

— Swinder Singh

According to the provisions of Section 87A of the Act, an assessee being an individual resident in India, whose total income does not exceed Rs 5 lakh shall be entitled to deduction from tax (computed before allowing the deductions under Chapter VIII) on his total income of an amount equal to 100% of such tax or Rs 5,000, whichever is less, for the assessment year (AY) 2017-18.  For the assessment year 2018-19, the rebate of Rs 2,500 is applicable where the total income does not exceed Rs 3,50,000. Note that the rebate of Rs 2,000 was allowable up to the AY 2016-17 which was raised to Rs 5,000 for the AY 2017-18.

Under which section(s) the following exempted incomes should be shown in ITR-I (SAHAJ) for AY 2017-18?

i) Interest from PPF Rs 1,99,444                                                     

ii) Mutual fund’s dividend (equity) Rs 71,924.95        

iii) Mutual fund’s long-term gain (equity) Rs 1,275                              

I am a senior citizen and my gross interest income in addition to the above is Rs 2,04,203. 

 — Sajjan Singh

Interest earned on Public Provident Fund is exempt under Section 10(11) of the Income Tax Act 1961.  The income received from mutual fund specified under Section 10(23D) of the Act is exempt under Section 10(35).  Long-term capital gain on the sale of units of an equity-oriented fund is exempt from tax under Section 10(38), provided securities transaction tax has been paid thereon.

My daughter is employed in an MNC. Her income details are: 

Salary Rs 7,09,000

Tax deducted Rs 37,900

Interest on FDRs Rs 53,600

TDS by bank Rs 5,370

Investments under 80 C Rs 1,50,000

Calculate her tax liability.  

— Asha

Total income of your daughter after allowing the relief under Section 80C of the Act works out at Rs 6,12,600. She will be liable to pay gross tax of Rs 48,946. The net tax payable would be Rs 5,676 after allowing deduction for tax deducted at source amounting to Rs 43,270.