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Tax rebate or tax refund is the money that is given back to the taxpayers who have paid more income tax than they owe. This money is generally given at the end of the financial year. However to claim this refund one has to file a tax return within a specified period. In India people get the tax rebate along with interest according to provisions made in the Income Tax Act.

Tax rebate is given to every individual who pays tax and even to those whose annual income is more than 5 lakh. The Union Budget of India provides tax rebate on various conditions like paying for the medical service of the taxpayer or his family members, on interest amount of a housing loan if it is being used by that taxpayer and on payment of medical insurance. People who invest in mutual funds and equity funds are completely exempted from paying dividends or taxes. But the companies that provide such schemes are not exempted and they have to pay taxes and the rate of interest charged on such payment is 10.2%. The employees that receive tax rebates are the ones who have received their salary in advance or have received salary of more than 12 months or in arrears.