11. Whar are the Rebate provisions u/s.88 of the Income Tax Act, 1961?
Ans. An individual gets a relief of the tax liability u/s. 88 of Income Tax Act. The rates of rebate available under Section 88 for Financial Year 2003-04 Rebate u/s. 88

Gross Total income before deductions	Rate of rebate
Up to 1.5 lakhs	20%
1.5 lakhs to 5 lakhs	15 %
Above 5 lakhs	NIL

The limit of Rs.1,00,000 of savings qualify for tax rebate u/s. 88 of Income Tax Act. If the taxpayer's gross total income is upto Rs.1,50,000, then he receives a tax rebate of 20% under Section 88. (If the gross total income does not exceed Rs 1,00,000, and 90% of it constitutes his salary then a tax rebate of 30% is available.) The maximum limit (Rs.1,00,000) includes minimum investment of Rs 30,000 for infrastructure bonds and a maximum sum of Rs 70,000 for items like Life insurance premium, Unit Linked Insurance Scheme, Equity Linked Scheme, etc. Alternatively, the entire Rs 1,00,000 can be invested in infrastructural bonds. This break-up is important because a person may invest, say, Rs.90,000 in a year - comprising of Rs.60,000 in PPF, Rs.20,000 in life insurance premium and Rs 10,000 in infrastructure bonds. In this situation even though the total payment is higher, benefit of rebate will be available only to the extent of Rs 80,000 because it has to conform to the internal breakup of the two limits.

If a taxpayer's income is between Rs.1.5 lakh to Rs.5 lakhs, he can avail a tax rebate of 15 percent on the amount invested in various instruments under Section 88 up to Rs 1,00,000. Income above Rs.5 lakhs does not qualify for rebate under section 88

Investments	Maximum Investment Permissible
PPF, LIC, NSC, Unit Linked Schemes etc	Upto Rs 70,000
Infrastructure Bonds	Upto Rs 1,00.000

Please note that an NRI cannot invest in PPF (Public Provident Fund),
Post Office Savings Bank-MIS (Monthly Income Scheme), NSC (National Savings Certificate), KVP (Kisan Vikas Patra)


12. What is the taxability of interest on NRE / FCNR deposits upon the NRI becoming a RNOR / ROR during the currency of the deposit?

Ans. Interest on NRE / FCNR deposits is exempt to NRI as mentioned below.

10(4)(ii)	Interest on NRE account to persons who are permitted under Exchange Control legislation or by Reserve Bank to maintain such accounts. (upto 31st March, 2005)
10(15)(iv)(fa)	Interest paid by scheduled bank on RBI approved foreign currency deposits, FCNR & RFC A/c. to a NRI or RNOR. (upto 31st March, 2005)

(i) In case of NRI becoming RNOR / ROR during the currency of deposit interest on NRE deposit will be taxable.

(ii) In case of NRI becoming ROR during the currency of deposit interest on FCNR deposit will be taxable.