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What is the maximum amount of investment in the shares of 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?
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- Rs. 80000
- Rs. 60000
- Rs. 20000
- Rs. 10000
- Rs. 80000
Correct Option: A
A salaried employee can claim tax rebate under section 88. Amount of tax rebate is 20% of 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 infrastructure sector; then the maximum rebate is only Rs. 12000 (20% of Rs. 60000). This rebate may be extended upto 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.
