Sources in the government say that the Budget may actually double the tax rebate from Rs 5,000 to Rs 10,000 under Section 87A of the Income Tax Act for those earning Rs 5 lakh a year. This Rs 1.5 lakh is taxed at the rate of 10 per cent, which comes to Rs 15,000. So now such taxpayers will now only have to pay Rs 10,000 as tax over Rs 1.5 lakh income, instead of Rs 15,000. For instance, if your annual gross total income is Rs 6,80,000 even then you can avail tax rebate benefit. Then your total income will be Rs 4,95,000 (Rs 6,80,000 minus 1.5 lakh minus Rs 25,000 minus 10,000) making you eligible for the government scheme should it happen.

Source: dna January 28, 2017 01:19 UTC