ITAT Mumbai allows Section 87A rebate on STCG: Here’s what taxpayers need to know

ITAT Mumbai allowed a taxpayer to claim Section 87A rebate on short-term capital gains (STCG) from equity shares for AY 2024-25.

The taxpayer had total income of ₹5.28 lakh, including ₹1.42 lakh STCG, and claimed rebate under Section 87A under the new tax regime.

The Income Tax Department's CPC initially denied the rebate, arguing it cannot reduce tax on income taxed at special rates (Section 111A).

ITAT ruled the rebate cannot be denied because the law for AY 2024-25 did not specifically restrict the benefit for STCG.

The ruling clarifies that Section 87A rebate applies to STCG when the law does not explicitly exclude such income.