The Government of India, in the 2019 interim budget, has increased the rebate limit under section 87A to Rs 12,500 from Rs 2,500 for individuals having taxable income not exceeding Rs 5 lakh.
The individual has to plan investments and park money in different tax saving avenues for the financial year (FY) 2019-20 and avail deductions to reduce his taxable income to Rs 5 lakh.
If an individual calculates his taxes early in the FY, he can invest his earnings in the most tax-friendly ways and reduce taxes to zero. With the changes proposed in the budget 2019 on the personal tax front, an individual with a gross total income up to Rs 9.50 lakh can now reduce his tax liability to NIL.
Interest Income Can Play A Role Too
Let’s assume that you have an interest income from a savings account of Rs 10,000 included in the gross total income of Rs 9.50 lakh. With the provisions of section 80TTA, this interest income can also be nullified by claiming a deduction of maximum Rs 10,000.
Here is how:
Please find the comprehensive table on how the Tax can be calculated to arrive at Zero.