Section 87a of income tax act

Sabyasachi Acharjya (Querist) 18 November 2013 This query is : Resolved
Sir,
I am an employer. I am deducting TDS from my employees by allowing slab of Rs.2,00,000/-. Now after inserting of Section 87a of I.T Act, Shall I allow Rs.2,20,000/- before computing TDS for the employees whose income is less then 5 lakhs.

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BAALASUBRAMANNYAMM (Expert) 18 November 2013
Many people think that the exemption limit is increased from Rs.2 to 2.2Lakhs. And some thinks that you need to claim refund of Rs.2000/- after you file the returns. But these two understandings are not correct.
Correct understanding is:
Tax Payers in Rs.2 to 5 Lakhs, slab will get a rebate of Rs.2000/- under Section 87 A and will claim this rebate, while filing the I.T.Return and will reduce their tax liability.

Rajendra K Goyal (Expert) 18 November 2013
Well advised by the expert, nothing more to add.

malipeddi jaggarao (Expert) 19 November 2013
Agreed with Shri Baala subramanyam.

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