Joint Commissioner of Income Tax Vs Gaurav Sharma (ITAT Jaipur)
Section 87A Rebate Available Even on Section 111A Short-Term Capital Gains for AY 2024-25: Jaipur ITAT
Summary: The Income Tax Appellate Tribunal, Jaipur Bench, considered the Revenue’s appeal and the assessee’s cross-objection concerning denial of rebate under Section 87A on tax payable on short-term capital gains. The dispute arose from processing of the assessee’s return under section 143(1), where the CPC denied the rebate. The CIT(A) allowed the claim, leading to the Revenue’s appeal. The assessee filed a cross-objection in support of the CIT(A)’s findings.
The Revenue questioned whether rebate under section 87A could be allowed on short-term capital gains taxable at special rates under section 111A. It also relied upon CBDT Circular No. 13/2025 dated 19.09.2025 and contended that rebate was never statutorily intended where income was chargeable under section 115BAC. The Tribunal recorded that the solitary issue concerned denial of rebate on tax paid on short-term capital gain.
The CIT(A), whose reasoning was reproduced extensively in the order, examined the interaction between section 115BAC and section 87A. The CIT(A) noted that the assessee had opted for the new tax regime and had not opted out of it. The amended section 115BAC(1A), inserted by the Finance Act, 2023 with effect from 01.04.2024, prescribes the applicable tax regime for AY 2024-25.
