Hi,
Looking for a detailed information for employees who can benefit from tax benefits for salary less than 5 lakh.
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No income tax needs to be paid if your income is below 5 lakh and yet there is a tax of 5% on income above 2.5L.If income exceeds 2.5L you need to pay income tax. However of it doesnt exceed 5L, this tax liability is cancelled out by a tax rebate. i.e. if your net taxable income does not exceed 5L, you are eligible for a tax rebate upto Rs 12500 under section 87A.
If an individual’s total taxable income is upto Rs. 5 lakhs then he will get the tax benefit of Rs. 12,500 or The amount of tax payable (whichever is lower)