The Income Tax Department has introduced a welcome opportunity for taxpayers eligible for the Section 87A rebate who missed claiming it for FY 2023-24. In a major relief, taxpayers can now file revised or belated Income Tax Returns (ITRs) to claim the rebate by the extended deadline of January 15, 2025. This update comes following a directive from the Bombay High Court and subsequent announcements by the department on December 31, 2024.
Revised ITR Filing for 87A Rebate: Eligible taxpayers can file revised or belated ITRs to claim the rebate.
Extended Deadline: The new deadline for filing is January 15, 2025.
Backend Updates Underway: The e-filing portal is being updated to accommodate these changes.
Section 87A of the Income Tax Act, 1961, allows eligible taxpayers to claim a rebate, effectively reducing their tax liability. For FY 2023-24:
Under the old tax regime, the rebate is up to Rs 12,500.
Under the new tax regime, the rebate is up to Rs 25,000.
The rebate applies to resident individuals with taxable incomes below specific thresholds. However, procedural issues in the e-filing system had earlier prevented many eligible taxpayers from claiming the rebate, particularly those filing after July 5, 2024. This led to confusion and notices being issued to affected individuals.
In an interim order dated December 20, 2024, the Bombay High Court highlighted the need to remove procedural barriers for eligible taxpayers. The court directed the Central Board of Direct Taxes (CBDT) to extend the deadline for filing revised or belated ITRs to January 15, 2025. This move ensures that taxpayers can claim their statutory rights without undue complications.
The Income Tax Department confirmed that backend updates to Forms ITR-2 and ITR-3 are underway. These forms are particularly relevant for taxpayers declaring incomes such as Short-Term Capital Gains (STCG), which were previously excluded from rebate eligibility. Once the updates are live, taxpayers can file their revised returns via the e-filing utility or directly on the portal.
Check Eligibility: Confirm if your taxable income qualifies for the Section 87A rebate.
Prepare for Filing: Gather necessary documents and ensure your income details are accurate.
Use Updated ITR Forms: Wait for the updated forms on the e-filing portal before proceeding.
Meet the Deadline: Submit your revised or belated ITR by January 15, 2025, to avoid complications.
This decision reflects a broader commitment to aligning procedural systems with legislative intent, ensuring that taxpayers are not unfairly penalized due to technical delays. Tax professionals and stakeholders have welcomed the move as a significant step towards procedural efficiency and taxpayer fairness.
Taxpayers are advised to take advantage of this extended deadline and rectify their filings promptly. With the final judgment on this matter scheduled for January 9, 2025, this proactive approach safeguards taxpayers’ rights and underscores the importance of staying informed about updates in tax regulations. Ensure accuracy in your filings to avoid any further complications or delays.
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