Rebate change instead of slab change: Budget 2019

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Rebate change instead of slab change: Budget 2019

Rebate change instead of slab change: Budget 2019 

Many people were of thought post Budget session that income tax slab rate has been changed to NIL tax up to Rs. 5,00,000. But Mr. Piyush Goyal clearly said that individuals having income up to Rs. 5,00,000 will have no tax burden, they will get full rebate.
There is a big difference between both of above. Here we can understand through an example:
Rebate u/s 87A will be applicable only in case of individuals having income up to Rs. 5,00,000.
In case of income above Rs. 5,00,000 normal tax slab will be applicable. In that case, individual will not get benefit of rebate.
 _Individual income up to 5,00,000_
Basic salary + DA    =    5,00,000
Other taxable allowances 50,000
Gross salary.                   5,50,000
-Standard deduction       50,000
Taxable Salary income  5,00,000
Income Tax.                    12,500
 *Rebate u/s 87A          (12500)*
Income Tax payable        NIL
Here individual is getting benefit of rebate.
 _Individual income above 5,00,000_
Basic salary + DA    =    7,77,200 Other taxab allowances 2,22,800
Gross salary                 10,00,000
-Standard deduction       50,000
Taxable Salary income  9,50,000
Income Tax                  1,02,500
 *Rebate u/s 87A            NIL*
Income Tax payable       1,02,500
Education cess @4%       4,100
Total tax                         1,06,600
Here individual can not get benefit of rebate.
Regards,
 CA Rohit Goyal

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