Section 155 is the framework provision for the rebates regime under Chapter IX. It is the substantive equivalent of 1961 s. 87 (the rebate-allowing umbrella). Section 155 does NOT itself grant any rebate; it merely AUTHORISES the…
155
Section 155 is the framework provision for the rebates regime under Chapter IX. It is the substantive equivalent of 1961 s. 87 (the rebate-allowing umbrella). Section 155 does NOT itself grant any rebate; it merely AUTHORISES the…
Section 155 — - REBATE TO BE ALLOWED IN COMPUTING INCOME-TAX
Section 155 is the framework provision for the rebates regime under Chapter IX. It is the substantive equivalent of 1961 s. 87 (the rebate-allowing umbrella). Section 155 does NOT itself grant any rebate; it merely AUTHORISES the deduction of rebates specified in s. 156 (and any future rebate provisions) from income-tax computed BEFORE Chapter-IX rebates. Two-sub-section structure: (1) authorising deduction of s. 156 rebates from pre-rebate-tax; (2) ceiling rule -- rebate cannot exceed pre-rebate income-tax (no negative-tax / refund-from-rebate). Practitioner-grade rule: this is the GATEWAY provision -- every individual return claiming s. 156 rebate must reference s. 155 mechanics.
STATUTORY ARCHITECTURE
Architecture: REBATE = REDUCTION FROM TAX (not from income). Distinct from DEDUCTION (Chapter VIII reductions from GTI to compute total income). Sequence in tax computation: Step 1 -- compute GTI; Step 2 -- claim Chapter VIII deductions to compute total income; Step 3 -- compute income-tax on total income at applicable rates (s. 202-204); Step 4 -- claim s. 155 / 156 rebates to compute net pre-surcharge tax; Step 5 -- apply surcharge / cess to get final tax. Section 155 is a UMBRELLA -- it positions the rebate regime within the tax computation flow but the substantive rebate is in s. 156 (the only rebate currently). Sub-s. (2) ceiling: rebate cannot exceed pre-rebate income-tax; this prevents creation of negative-tax / refund through rebate alone (distinct from refundable-credit regimes in some jurisdictions like US EITC).
PLANNING NOTES
(i) RETURN-FORM SEQUENCING -- ITR forms include explicit sequencing; ensure rebate claimed at correct stage of tax computation (Schedule TTI for ITR-1 / ITR-2). (ii) NO-REFUND-FROM-REBATE -- low-income individual whose tax is INR 5K and rebate is INR 60K (under s. 156(2)) gets only INR 5K rebate, not INR 60K; no negative-tax. (iii) SURCHARGE / CESS -- post-rebate income-tax is the base for surcharge and 4% cess; rebate reduces both proportionately.
CROSS-REFERENCES