All Details About Tax Credit Of Rs.2,000/- You May Need

Posted Date : 04-Aug-2013 , 02:43:12 am | Posted By CASANSAAR print

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All Details About Tax Credit Of Rs.2,000/- You May Need.

Tax credit of Rs 2,000 for persons with income up to Rs 5 lakh

As per the existing slabs, tax on income from 2 lakh to 5 lakh is at 10 per cent, up to Rs 10 lakh at 20 per cent and above 10 lakh at 30 per cent.

From Financial year 2013-2014, in addition to above basic exemption limit further benefit of Rs.2,000/- is available to Individuals.

Here are some generally asked questions regarding this credit :

1) Whether basic exemption limit for Individuals, HUF’s, AOP & BOI under the Income Tax Act, 1961 has been raised from Rs. 2,00,000/- to Rs. 2,20,000/-
Ans. NO, the basic exemption limit remains unchanged at Rs. 2 Lakh for FY 2013-14 (AY 2014-15).

2) Say my income is Rs. 5,50,000/- and I have paid Life Insurance premium of Rs. 50,000/-. Will I be eligible to claim the rebate?
Ans. Yes, because the ‘Total Income’ after deducting all the deductions available under Chapter VI from the ‘Gross Total Income’ shall not exceed Rs. 5 Lakh.

3) That’s great!! I am filing IT returns for myself and as Karta of HUF, so I can take total benefit of Rs. 4,000/-.
Ans. No, this rebate is available ONLY to an ‘INDIVIDUAL’ tax payer, resident in India.

4) How will this benefit a senior citizen (age 60 or above) because the exemption limit in his case is already Rs. 2,50,000/- i.e. in excess of Rs. 2,20,000/-?
Ans. Tax Rebate of Rs. 2,000/- is also available to a senior citizen, if the total income is Rs. 5 Lakh or less. Effectively, it means, a senior citizen, both male and female, need not pay any tax on total income of upto Rs. 2,70,000/-. However, this benefit is not available to a super senior citizen (age 80 or above) as his total income upto Rs. 5 Lakh is already fully exempted.

5) The rebate of Rs. 2000/- is available from which year?
Ans. The new section has been inserted with effect from the 1stday of April, 2014 means it is applicable for Assessment Year 2014-15 and thereafter. In simple words, when you will be filing your income tax return for the Financial Year 2013-14, you will get rebate of upto Rs. 2000/-