ITR Filing Update: The Income Tax Department suddenly stopped giving tax rebate under 87A on equity income after July 5. A public interest litigation was filed against its decision.
Income Tax Return Filing: The Bombay High Court has given a big relief to those taxpayers who are entitled to get tax rebate under 87A of the Income Tax Act. The High Court has 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. However, the Bombay High Court will give its final decision in this matter on January 9, 2025.
What is the whole matter?
The Chamber of Tax Consultants had filed a PIL in the Bombay High Court on which the court has given this order to the CBDT. In July 2024, when taxpayers were filing income tax returns for the financial year 2023-24 and assessment year 2024-25, the CBDT suddenly stopped giving tax rebate under section 87A to those taxpayers who filed income tax returns after July 5, 2024, even though they were entitled to it. Taxpayers across the country knocked the doors of the court and now they seem to be getting justice from the Bombay High Court.
The Bombay High Court has ordered the CBDT to extend the date for filing revised and belated income tax returns to January 15, 2025. The date for filing ITR will be extended only for such taxpayers who are entitled to claim tax rebate under section 87A. The interim decision of the Bombay High Court has come and the final decision will come on January 9, 2025.
Bombay High Court will give its final verdict on 9th January
After 5th July 2024, Income Tax Department has stopped giving tax rebate under 87A for filing utilities special income like short term capital gain on equity shares or income from equity oriented mutual funds which is taxed at 15%. CBDT suddenly banned giving tax rebate under 87A on such income in utility software.
While in the Finance Act of the year 2019, a provision was made to claim tax rebate under 87A on annual income up to Rs 5 lakh in the old tax regime, if the tax was Rs 12500. Whereas in the new tax regime, a tax rebate of Rs 25000 was being given under 87A for annual income less than Rs 7 lakh. The Chamber of Tax Consultants in its petition told the court that the purpose of tax rebate under 87A was to provide relief to low-income earners from the burden of tax. And arbitrarily disabling 87A in the utilities software undermines the intent of the legislature.
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