ITO Vs Deepak Kalani (ITAT Jaipur)
Jaipur ITAT: Section 87A Rebate Available Even Against Tax on Section 111A STCG for AY 2024-25
The assessee opted for the Section 115BAC/new tax regime for AY 2024-25 and claimed rebate under Section 87A of ₹11,564 against tax payable on short-term capital gains taxable under Section 111A. CPC subsequently passed a rectification order under Section 154 disallowing the rebate. On appeal, the Addl./JCIT(A) directed CPC to grant the Section 87A rebate.
The Revenue challenged the relief, contending that Section 87A rebate is not available against income taxable at special rates, including STCG under Section 111A. Revenue also relied upon CBDT Circular No. 13/2025, arguing that the Circular clarified that such rebate was never statutorily intended to be available.
The Jaipur ITAT rejected the Revenue’s contention. It noted that the identical issue for AY 2024-25 already stood decided in favour of taxpayers by the Ahmedabad ITAT in Jayshreeben Jayantibhai Palsana v. ITO and also by the Jaipur Bench itself in ITA No. 1412/JPR/2025 dated 25.06.2026.
Importantly, the Departmental Representative could not point to any contrary decision of the jurisdictional High Court or the Supreme Court. Following the coordinate-bench decisions, the Tribunal held that the Section 87A rebate against tax on Section 111A STCG was allowable for AY 2024-25 and that the appellate authority’s grant of rebate required no interference.
Key takeaway: For AY 2024-25, the Jaipur ITAT has reaffirmed that an eligible assessee under the new regime can claim Section 87A rebate even against tax attributable to STCG taxable under Section 111A. Significantly, the Tribunal did not accept the Revenue’s reliance on CBDT Circular No. 13/2025 as sufficient to dislodge the judicial view already prevailing in favour of the assessee.
Cases Discussed:
- Jayshreeben Jayantibhai Palsana vs. ITO (Ahmedabad ITAT), ITA No. 1014/Ahd/2025
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
