Non Computation of Rebate u/s 87A in ITR form 3 Utility For AY 2024-25

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Shyam Kamat

6 Points Joined May 2017

For AY 2024-25, I have to file ITR 3 for a client. His Taxable Total Income is less than Rs.7 Lakh and he is therefore eligible for Rebate u/s 87A of Income Tax Act 1961. However, the online utility for ITR 3 is not calculating the tax rebate u/s 87A and hence creating erroneous demand. During telephonic conversation with CPC , they have admitted that many Assessees are facing this problem.

I have raised this issue with CPC repeatedly during last two months by raising 5 Grievances, sending multiple mails to orm @ cpc.incometax.gov.in and to efilingwebmanager.incometax.gov.in.

So far there is no action. My grievances are beong closed in mechanical manner without giving any solution.

Can other members advise whether they are facing similar problems. Also can some one advise what can be done in such cases and how to elavate the complaint to higher authority?

Replies (10)

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

197984 Points Joined July 2016

Department has clarified that the rebate u/s. 87A is not eligible under new regime for the income taxed at SPECIAL RATES.

Shyam Kamat

6 Points Joined May 2017

Thanks for your clarification

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

197984 Points Joined July 2016

You are welcome.

Sandeep Jain

Pivate

1477 Points Joined July 2019

Respected Dhirajlal Sir,

What i do i have filed ITR before 5 July Can i go for Revised. please suggest

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

197984 Points Joined July 2016

No, you may get chance of getting away, due to glitch in the utility. Wait & see what is their stand. At the most, you may be asked to pay differencial amount, but not fine.

Sandeep Jain

Pivate

1477 Points Joined July 2019

Thank you Sir,

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

197984 Points Joined July 2016

You are welcome.

CA ANSHUL PATHAK

2 Points Joined July 2024

But the disallowance is for the Income taxed at special rates only and 87A rebate shall be allowed for remaining Income portion.

Then why utility is not aloowing 87A at all???

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

197984 Points Joined July 2016

For remaining tax laibility (if aggregate income is below 7 lakhs) rebate is allowed.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

197984 Points Joined July 2016

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.