Renu Singla Vs ITO (ITAT Delhi)
Future Special-Rate Restriction Cannot Deny AY 2025-26 Rebate; CPC Cannot Exclude STCG From Section 87A Rebate Retrospectively: ITAT Delhi
The Delhi ITAT has held that, for AY 2025-26, a resident individual opting for the new tax regime u/s 115BAC(1A) is entitled to rebate u/s 87A even against tax attributable to STCG taxable u/s 111A, provided the total income does not exceed ₹7 lakh. The statutory exclusion of special-rate income was introduced only by the Finance Act, 2025 with effect from AY 2026-27 & could not be applied retrospectively. The CPC intimation was set aside & the assessee was granted the full rebate of ₹25,000.
Facts of the case
The assessee, Mrs. Renu Singla, filed her return of income for AY 2025-26 under the new tax regime prescribed u/s 115BAC.
Her total income was stated to be ₹5,73,610, which was below the threshold of ₹7 lakh prescribed in the first proviso to section 87A.
The income included income from house property, income from other sources & STCG arising from transfer of equity shares taxable at the special rate u/s 111A.
While computing her tax liability, the assessee claimed rebate of ₹25,000 u/s 87A against the total tax payable, including the tax attributable to STCG u/s 111A.
