A tax rebate is a refund issued by the government to taxpayers who have overpaid their taxes. This can happen when individuals or businesses pay more in taxes than they owe based on their income and deductions. The rebate helps to return excess funds to taxpayers, providing them with financial relief. Tax rebates can come in various forms, such as direct payments or credits applied to future tax liabilities. They are often used as a tool to stimulate the economy, encouraging spending and investment by putting money back into the hands of consumers and businesses.