Section 88 Rebates - A summary of the activity

Section 88 Rebates – A summary of the activity

Through this activity, you can specify the rebates applicable to an assessee under section 88. As the tax liability of an assessee is determined, a rebate is allowed to a certain limit if he/she invests certain amount in securities as specified by the Income Tax authorities.

Note that assessee refers to a person who is liable to pay tax under the Income Tax Act. In our context, assessee refers to an employee.

These securities are of two types namely, infra structure and non- infrastructure.

Specifying Section 88 rebates for a tax year involves:

Specifying the maximum amount applicable under the section.
The maximum amount that can be availed under the infrastructure and non infrastructure categories.
Percentage of investment that can be availed as rebate for different income levels.

How do you compute tax rebate

For example in a tax year, if the rebate given is 20% of eligible investment subject to a maximum of Rs 60, 000, if the salary income is more than Rs100, 000 and 30% if the salary income is less than Rs100, 000.

This means,

The maximum amount that can be availed is Rs12, 000 (20% 60,000).
If the income is less than 1,00,000, the rebate will be calculated as 30% of the eligible investments subject to a maximum of Rs12, 000.
If the income is more than 1,00,000, the rebate will be calculated as 20% of the eligible investments subject to a maximum of Rs12, 000.

For Example, if you have an income of Rs90, 000 and

If you invest…	Eligible amount is…	You can avail rebate of…
Rs3000	Rs600 (20% of 3000)	Rs600
Rs90, 000	Rs16, 000 (20% of 80, 000)	Rs12, 000 (Maximum amount)

Getting familiar with the pages inside

Go to the page…	… to carry out task
Section 88 Rebates	Section 88 Rebates
Rebate Items	Specifying value for rebate items
Other Rebates	Specifying other rebate items

Prerequisites

The tax year must have been defined in the “Create Tax Year” activity.

The various rebate items must be defined in the quick codes.

What you can do in this activity

Specify Section 88 Rebates

Section 88 Rebates

You can specify the various rebates applicable to employees under section 88 in the “Section 88 Rebates page.

Specify the tax year for which the rebates must be defined.
Specify the maximum limit applicable under the section.
Specify the maximum limits applicable under infrastructure bonds and non infrastructure securities.
Specify the percentage of investments applicable for various income levels.
Save the details entered.