Aman Dani Vs ITO (ITAT Jaipur)
CPC Cannot Manufacture an Exception Missing from the Act — Section 87A Rebate Allowed on STCG Tax u/s 111A
The Jaipur Bench of the ITAT has held that a resident individual governed by the new tax regime for AY 2024-25 is entitled to rebate u/s 87A against tax payable on short-term capital gains u/s 111A, provided the total income does not exceed ₹7 lakh. The statute applicable to the year contained no express prohibition against allowing the rebate on tax computed at the special rate u/s 111A.
The assessee, Aman Dani, filed the return for AY 2024-25 on 21.07.2024 under the new tax regime u/s 115BAC, declaring a total income of ₹4,54,020. The income included short-term capital gains from listed securities falling u/s 111A.
The gross STCG was stated to be ₹2,45,610. After the applicable computation and adjustment, tax was calculated on taxable STCG of ₹1,53,461 at the special rate of 15%, resulting in a tax liability of ₹23,019. Since the total income was below ₹7 lakh, the assessee claimed an equivalent rebate u/s 87A.
CPC processed the return u/s 143(1) on 23.09.2024, accepting the returned total income but denying the rebate of ₹23,019. The assessee filed a rectification application u/s 154, but CPC rejected it without modifying the earlier computation.
