Daijiworld Media Network - New Delhi

New Delhi, Sep 23: The Central Board of Direct Taxes (CBDT) has issued a clear directive stating that taxpayers cannot claim rebate under Section 87A on income taxed at special rates, such as short-term capital gains (STCG). The move comes in response to widespread confusion and incorrect rebate claims filed during the 2023–24 financial year.

Many taxpayers who had STCG income — taxed at a concessional rate of 15% for FY 2023–24 — incorrectly claimed the Section 87A rebate, which is meant to reduce or eliminate tax liability for those with income under Rs 5 lakh (old regime) or Rs 7 lakh (new regime). As a result, the Income Tax Department has denied these claims and begun issuing fresh tax demands, even in cases where rebates were mistakenly granted

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