Now Reading: ITAT Jaipur allows Section 87A rebate on short-term capital gains for AY 2024-25
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ITAT Jaipur allows Section 87A rebate on short-term capital gains for AY 2024-25
ITAT Jaipur allows Section 87A rebate on short-term capital gains for AY 2024-25
The Income Tax Appellate Tribunal (ITAT) in Jaipur has ruled that eligible taxpayers can claim the Section 87A rebate on tax payable on short-term capital gains (STCG) for assessment year (AY) 2024-25.…
The Income Tax Appellate Tribunal (ITAT) in Jaipur has ruled that eligible taxpayers can claim the Section 87A rebate on tax payable on short-term capital gains (STCG) for assessment year (AY) 2024-25. The bench, comprising Accountant Member Annapurna Gupta and Judicial Member Kuldip Singh, upheld the Commissioner of Income Tax (Appeals) order in the case of Income Tax Officer v. Madhu Agarwal, dismissing the Revenue's appeal.
The taxpayer had total income of Rs 4,99,250 for AY 2024-25, including STCG of Rs 3,61,100. The Centralised Processing Centre (CPC) denied a rebate claim of Rs 23,276 during return processing. The tribunal noted that for AY 2024-25, Section 87A did not expressly exclude STCG under Section 111A, unlike long-term capital gains under Section 112A, which was excluded.
The tribunal also observed that the Finance Bill 2025 introduced restrictions on Section 87A from AY 2026-27, confirming that the restriction was not part of the law for AY 2024-25. It held that an automated denial by the CPC cannot override statutory provisions. The ruling is specific to AY 2024-25 and does not apply to later years where the law has changed.
Indian Opinion Analysis
The ITAT Jaipur ruling turns on a technical gap that the government has since closed. For AY 2024-25, Section 87A did not list short-term capital gains under Section 111A among the incomes excluded from the rebate, the Finance Act 2025 added that exclusion with effect from AY 2026-27. The case affects resident individuals whose total income was below Rs 7 lakh under the new tax regime but had STCG taxed at 15%. The CPC's automated system denied the rebate, but the tribunal held that a processing centre's letter cannot override the statute. For AY 2024-25, taxpayers in similar circumstances who were denied the rebate can cite this order. For later years, the law has changed, so the precedent is limited.
Source: livemint.com
This brief was synthesised by AI from the source linked above.
