Clarity Regarding Section 87A Rebate
This query is : Resolved
07 July 2024
Sir,
I want to have some clarity regarding the provisions of rebate under section 87A of income tax Act 1961. As per the relevant provisions, if a person opting for new tax regime, he/she can avail rebate of Rs. 25,000 or amount of tax whichever is lower if total taxable income does not exceed Rs. 7,00,000. But in Case of an individual whose taxable income was Rs. 6,80,000 out of which Rs. 35,000 was short term capital gain taxable @ 15%. Total tax liability comes to Rs. 24,750.So, as per the rule whether the person can claim rebate under section 87A. If we fill the details in the ITR form online mode, Rs. 5,250 was shown as tax liability. Is it correct
I want to have some clarity regarding the provisions of rebate under section 87A of income tax Act 1961. As per the relevant provisions, if a person opting for new tax regime, he/she can avail rebate of Rs. 25,000 or amount of tax whichever is lower if total taxable income does not exceed Rs. 7,00,000. But in Case of an individual whose taxable income was Rs. 6,80,000 out of which Rs. 35,000 was short term capital gain taxable @ 15%. Total tax liability comes to Rs. 24,750.So, as per the rule whether the person can claim rebate under section 87A. If we fill the details in the ITR form online mode, Rs. 5,250 was shown as tax liability. Is it correct
08 July 2024
Not Correct. It is bug in new version of the utility released. File grievance with screenshot.
26 August 2024
Hope the error is resolved.
08 December 2024
The case of **Beena Manishbhai Fofaria vs. CIT (Appeals)** revolves around the application of **Section 87A** of the Income Tax Act, especially after the amendments brought by the Finance Act, 2023.
In this case, the taxpayer filed her return for the Financial Year 2023-24, declaring a total income of Rs. 6,93,260, which included short-term capital gains (STCG) of Rs. 65,066. She claimed a rebate of Rs. 20,010 under Section 87A, as her total income was under Rs. 7,00,000. However, the Centralized Processing Centre (CPC) restricted the rebate to Rs. 10,250, disallowing the rebate on STCG. This led to a reduced refund amount, prompting the taxpayer to file an appeal.
The CIT (Appeals) ruled in favor of the taxpayer, stating that the Finance Act, 2023, permits a rebate on total income (excluding long-term capital gains taxed under Section 112A) if the total income is within Rs. 7,00,000. The ruling confirmed that short-term capital gains are eligible for the rebate if the total income is under Rs. 7,00,000.
This case is significant as it clarifies the application of Section 87A and benefits many taxpayers.
In this case, the taxpayer filed her return for the Financial Year 2023-24, declaring a total income of Rs. 6,93,260, which included short-term capital gains (STCG) of Rs. 65,066. She claimed a rebate of Rs. 20,010 under Section 87A, as her total income was under Rs. 7,00,000. However, the Centralized Processing Centre (CPC) restricted the rebate to Rs. 10,250, disallowing the rebate on STCG. This led to a reduced refund amount, prompting the taxpayer to file an appeal.
The CIT (Appeals) ruled in favor of the taxpayer, stating that the Finance Act, 2023, permits a rebate on total income (excluding long-term capital gains taxed under Section 112A) if the total income is within Rs. 7,00,000. The ruling confirmed that short-term capital gains are eligible for the rebate if the total income is under Rs. 7,00,000.
This case is significant as it clarifies the application of Section 87A and benefits many taxpayers.
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