New Delhi: The Central Board of Direct Taxes (CBDT) has once again clarified that taxpayers cannot claim tax rebate under Section 87A of the Income Tax Act on income that is taxed at special rates, such as short-term capital gains (STCG).

In the financial year 2023-24, many taxpayers claimed a rebate on short-term capital gains, but the Income Tax department denied their requests and raised demands for the pending taxes.

The department has now asked such taxpayers to clear their dues by December 31, 2025. This applies even to those cases where the rebate was mistakenly given earlier.

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The CBDT, in its circular dated September 19, said that in several cases, returns were processed incorrectly, and a rebate was allowed on incomes chargeable to special ta

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