ITAT Ahmedabad Allows Section 87A Rebate Against STCG Taxable u/s 111A Under New Tax Regime for AY 2024-25
Jayshreeben Jayantibhai Palsana vs. ITO (1014/Ahd/2025 , ITAT Ahmedabad, 12 Aug 2025)
Facts:
1. The assessee’s only tax liability (₹13,320) arose from STCG u/s 111A of the Income Tax Act. Total income was below ₹7 lakh, and she opted for 115BAC(6) of the Income Tax Act in the revised return. CPC disallowed the rebate u/s 87A of the Income Tax Act without giving reasons.
2. CIT (A) claimed that rebate can’t apply to incomes taxed at special rates under Chapter XII when under 115BAC(1A). It relied on the Finance Bill 2025 explanatory memorandum.
ITAT Ahmedabad held as below:
1. Section 87A applies to any resident with total income ≤ ₹7 lakh under 115BAC(6). No statutory bar exists against applying rebate to STCG u/s 111A.
2. Section 112A(6) expressly disallows rebate for LTCG, but no such bar exists for STCG.
3. The memorandum to Finance Bill 2025 proposing restrictions from AY 2026-27 shows that no such restriction existed for AY 2024-25.
4. CPC’s denial was system-driven, not statutory.
5. Rebate u/s 87A was allowed against STCG u/s 111A for AY 2024-25 under 115BAC(1A).
The copy of the order is as under:
