The Central Board of Direct Taxes (CBDT) has stepped in to ease the burden on small taxpayers who unexpectedly faced fresh tax demands after errors in processing the Section 87A rebate were corrected.

Under current rules, Section 87A of the Income Tax Act provides a rebate for taxpayers with taxable income up to ₹7 lakh, effectively reducing their liability to zero. However, this rebate only applies to income taxed at normal slab rates, not to special-rate incomes such as short-term or long-term capital gains, lottery winnings, or other specified categories. Advertisement

Due to system glitches and incorrect processing, some taxpayers were wrongly granted this rebate even on special-rate incomes. When rectifications were made, fresh tax demands were generated — shocking many who had ear

See Full Page