Section 155 — Rebate to be allowed in computing income-tax. Successor to s.87 of the 1961 Act.
Section 155 is in Chapter IX — Rebates and Reliefs, which runs from section 155 to section 160.
Sub-section (1) is the enabling rule for the rebate: in computing the income-tax chargeable on an assessee's total income for a tax year, the deductions specified in section 156 are to be allowed from the income-tax figure as computed before any deduction under this Part. Sub-section (2) caps them — the section 156 deduction can never exceed that pre-rebate income-tax on the total income. The section itself specifies no amount, no rate and no class of assessee; the substance of the rebate is in section 156.
It fixes the base against which the rebate is measured — income-tax computed before the Part's deductions — and ensures the rebate can only wipe out tax, never generate a refund of tax that was never charged.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Ceiling on the section 156 deduction | Income-tax on the total income as computed before allowing the deductions under this Part | Applies in any case, so the rebate cannot exceed the tax otherwise payable | 155(2) |
On its own this section will not tell you whether you get a rebate or how much — go to section 156 for the amount and the conditions. What it does settle is the arithmetic: the rebate comes off tax, not off income, and it is limited to the tax computed before the rebate, so an excess rebate is simply lost rather than refunded.
An individual's income-tax on his total income, computed before any deduction under this Part, comes to Rs. 12,000, while the deduction section 156 gives him works out higher than that. Sub-section (2) caps it: the section 156 deduction cannot in any case exceed the Rs. 12,000 of income-tax computed before the rebate, so his tax falls to nil and the excess is simply lost, not refunded. The section also fixes where the arithmetic happens — the rebate comes off income-tax after it has been computed, not off total income before it.
Only as a line in the tax computation of the return and in the intimation or assessment that recomputes it; there is no notice, form or proceeding for section 155 itself. What a taxpayer actually meets is section 156, which supplies the amount and the conditions this section merely permits and caps.
The deduction under section 156, shall not, in any case, exceed income-tax (as computed before allowing the deductions under this Part) on the total income of the assessee
See the full 1961 to 2025 concordance.
See the circulars index.