Question
What is the maximum amount of investment in the shares or debentures of notified companies like the ICICI, the IDBI etc. that will entitle a rebate in income tax up to 20% of the amount invested?
Answer: Option B
Answer: (b)
A salaried employee can claim a tax rebate under section 88. The amount of tax rebate is 20% of the gross qualifying amount (Rs.80000) or Rs.16000, whichever is lower.
If a person invests only in other securities, excluding shares, debentures and units of the infrastructure sector; then the maximum rebate is only Rs.12000 (20% of Rs.60000).
This rebate may be extended up to Rs.16000 on further investment up to Rs.20000 in shares and debentures. By investing in shares, debentures and infrastructure units a maximum rebate of Rs.16000 (i.e., 20% of Rs.80000) may be claimed.
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Answer: (b)
A salaried employee can claim a tax rebate under section 88. The amount of tax rebate is 20% of the gross qualifying amount (Rs.80000) or Rs.16000, whichever is lower.
If a person invests only in other securities, excluding shares, debentures and units of the infrastructure sector; then the maximum rebate is only Rs.12000 (20% of Rs.60000).
This rebate may be extended up to Rs.16000 on further investment up to Rs.20000 in shares and debentures. By investing in shares, debentures and infrastructure units a maximum rebate of Rs.16000 (i.e., 20% of Rs.80000) may be claimed.
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