ITAT Jaipur Upholds CA Student's Claim For Section 87A Rebate On Short-Term Capital Gains Tax

The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) on 25 June held that a resident individual who opts for the new tax regime under Section 115BAC of the Income Tax Act and whose total income falls within the prescribed threshold is entitled to claim rebate under Section 87A even against tax payable on short-term capital gains under Section 111A.

Accountant Member Annapurna Gupta allowed an appeal filed by Priyamvada Singhal, a CA student and directed the Revenue to grant the rebate for Assessment Year 2024–25. She observed:

“I hold therefore that the denial of grant of rebate to the assessee u/s 87A of the Act is not in accordance with law. I accordingly direct that the assessee be granted the rebate u/s 87A of the Act.”

The taxpayer had opted for taxation under Section 115BAC and claimed rebate after reporting income from stipend, interest, dividends, and short-term capital gains. The Centralised Processing Centre denied the rebate against tax payable under Section 111A, a view that was subsequently upheld by the Commissioner (Appeals).

The Tribunal noted consistent ITAT precedents and the absence of any contrary High Court or Supreme Court ruling, and held that the denial of rebate was not sustainable in law.

Accordingly, the ITAT allowed the appeal.