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| Home » Income Tax System in India » Income Tax Rebates |
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Income Tax Rebates |
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There are many Income Tax Rebates available. Income Tax rebates allow the assessee to lower the amount of tax. There are a number of ways by which you can get rebates in income tax. Investments in certain areas allow you be eligible to get income tax rebates.
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Section 80C
Schemes eligible for Section 80C benefits are:
- PPF (Public Provident Fund)
- ELSS- Mutual Funds
- NSC ( National Savings Certificate)
- KVP( Kisan Vikas Patra)
- Life Insurance
A maximum amount up to Rs 1 lakh can be invested under this section without any individual sub-limits except in the case of Rs 10,000 in pension funds. Sections 88, 80L, 80CCC and 80CCD has been merged in this section. The individual is subject to get income tax rebates when he invests in any of the above mentioned schemes.
It is to be noted that Section 80CCC under Income Tax Rebates is for deduction in respect of contribution to certain Pension Funds. Section 80L is for deductions in respect to Interest on certain
Securities, Dividends and so on.
Section 10(33)
Dividends from mutual funds are fully exempt from income tax under Section 10(33). Equity funds are also exempt from dividend tax. This means that unlike companies, individuals do not need to pay tax at on the dividend that the company distribute. Rebate in Income Tax tax is available in this way.
Section 88
According to this section, 30 per cent or 20 per cent or 15 per cent of the amount invested in certain schemes (schemes referred in Section 80C) was available as a rebate on the tax payable. However, if the gross total income was more than Rs 5 lakh of the individual, then there was no income tax rebates.
Section 88B
Under this section, a resident of India above the age of 65 years was allowed to a maximum income tax rebate of Rs. 20,000 on the payable tax.
Section 89 (1)
This rebate in income tax is available to an employee when he receives salary in advance or in arrear. It is also applicable when in one financial year, he receives salary of more than 12 months or receives profits in lieu of salary.
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