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

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

Thanks for your clarification 

You are welcome.                

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.

You are welcome.           

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???

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

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.