CMA Intermediate · Direct and Indirect Taxation · Deductions, Rebate and Relief
Meera, a resident individual, has a total income of Rs. 4,80,000 for the tax year, and the income-tax computed on it before any rebate is Rs. 10,000. Under section 156(1) of the Income-tax Act, 2025, what is the rebate available to her?
The rebate is Rs. 10,000. Under section 156(1), a resident individual with total income up to Rs. 5,00,000 gets 100% of the tax or Rs. 12,500, whichever is less. Her tax of Rs. 10,000 is lower, so the whole tax is rebated.
- ARs. 12,500
- BRs. 10,000Correct
- CRs. 2,500
- DNil
Explanation
Section 156(1) allows 100% of the income-tax payable or Rs. 12,500, whichever is less, where total income does not exceed Rs. 5,00,000. Income-tax is Rs. 10,000, which is lower than Rs. 12,500, so the rebate is Rs. 10,000 and the tax payable becomes nil. Rs. 12,500 is wrong because the rebate cannot exceed the tax computed.
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