Income Tax Department: The Bombay High Court, in its interim decision, had given a big relief to those taxpayers who are entitled to get tax rebate under 87A of the Income Tax Act.
Income Tax Return: There is good news for those taxpayers who could not get tax rebate under 87A while filing income tax return despite being eligible for the financial year 2023-24 and assessment year 2024-25. The Income Tax Department has announced that the option of getting tax rebate under 87A will be given by updating the utility form of Income Tax Return Form No. 2 and 3, after which taxpayers will be able to get tax rebate by filing revised or belated returns.
The Income Tax Department has given this update on its e-filing portal that to make effective the circular number 21 issued on 31 December 2024, the utility in Income Tax Return Form No. 2 and 3 will be updated and it will include the option of getting tax rebate under 87A. The facility will be made available to the taxpayers as soon as possible.
Recently, the Bombay High Court in its interim decision gave a big relief to those taxpayers who are entitled to get tax rebate under 87A of the Income Tax Act. The High Court had ordered the Central Board of Direct Taxes (CBDT) to extend the date for filing revised and belated income tax returns for such taxpayers till January 15, 2025 so that they can claim tax rebate under 87A. The Bombay High Court will give its final decision in this matter on January 9, 2025.
What is the matter?
A PIL was filed in the Bombay High Court challenging the decision of not giving tax rebate under 87A to taxpayers despite being eligible for the financial year 2023-24 and assessment year 2024-25 in July 2024. The petition was filed in the court after the CBDT suddenly stopped giving tax rebate under section 87A to taxpayers who filed income tax returns after July 5, 2024. The date of filing ITR will be extended only for such taxpayers who are entitled to claim tax rebate under section 87A. The Income Tax Department has stopped giving tax rebate under section 87A in income tax return filing utilities for special income such as short term capital gains on equity shares or income from equity oriented mutual funds which is taxed at 15 percent. CBDT suddenly stopped giving tax rebate under 87A on such income in utility software.
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