“CIT Appeals Issues New Order Granting 87A Rebate on Special Rate Income: In a recent ruling, the Commissioner of Income Tax (CIT) Appeals has clarified that taxpayers are eligible for the 87A rebate on special rate income. This new order provides significant relief, ensuring that individuals can avail of the rebate even on income subject to special tax rates, thereby reducing their overall tax liability.”

Rebate under Section 87A allowable on special income under new tax regime: Appellate Authority

Recently a controversy is going on regarding allowability of rebate under Section 87A on special income under the new tax regime from A.Y. 2024-25, resulting in issuance of demand notices to large number of small taxpayers.

Rebate u/s. 87A was not allowed by the department under the new tax regime on capital gain on shares, against which an appeal is filed before the first appellate authority [CIT(A)]. The CIT(A) after thoroughly going throughout the submissions, allowed the appeal holding that rebate u/s. 87A is allowable on total income (including special income like capital gain) under the new tax regime.

A favourable order from CIT(A) sets the stage for other assessees to file an appeal, get their demands deleted and avail the rebate in the succeeding years under the new tax regime till the time department brings in a specific amendment in the law.

Here, attaching the order of CIT(A) consisting written submissions which may be helpful to other assessees to represent their case before CIT(A).