Bombay HC to decide PIL on Section 87A Income Tax Rebate Denial Tomorrow
Initially listed for final disposal on January 9, 2025, the hearing has now been adjourned to January 10, 2025, as both parties agreed to the delay
The Bombay High Court has set the date for final disposal of the Public Interest Litigation (PIL) challenging denial of the Section 87A Income Tax Act rebate for Assessment Year 2024-25 to January 10, 2025. The PIL, filed by The Chamber of Tax Consultants, contests the disabling of Section 87A rebate claims through the updated tax filing utility. The petitioner argued that modifications...
The Bombay High Court has set the date for final disposal of the Public Interest Litigation (PIL) challenging denial of the Section 87A Income Tax Act rebate for Assessment Year 2024-25 to January 10, 2025.
The PIL, filed by The Chamber of Tax Consultants, contests the disabling of Section 87A rebate claims through the updated tax filing utility.
The petitioner argued that modifications to the tax filing utility after July 5, 2024, arbitrarily prevented eligible taxpayers from availing the Section 87A rebate. This rebate, intended to offer tax relief to individuals with income below a certain threshold, is a vital feature of equitable taxation.
Under Section 87A:
- Taxpayers with a total income of up to ₹5 lakh (under the old tax regime) are eligible for a rebate of ₹12,500.
- Taxpayers with a total income of up to ₹7 lakh (under the new regime) are eligible for a rebate of ₹25,000.
However, the Income Tax Department’s updated filing utility reportedly restricted the rebate for taxpayers filing under the new regime in cases where tax is levied at special rates, such as 15% on short-term capital gains or 10% on long-term capital gains from equity shares or equity-oriented mutual funds.
The bench, comprising Chief Justice Devendra Kumar Upadhyaya and Justice Amit Borkar, made critical remarks regarding the procedural restrictions imposed by the updated utility. The court emphasized:
- Procedural changes cannot override statutory rights.
- The Section 87A rebate is tied to the total income and should be accessible to all eligible taxpayers.
- The Income Tax Department’s role is to facilitate compliance with legislative intent, not to impose procedural barriers.
The court directed the Central Board of Direct Taxes (CBDT) to extend the ITR filing deadline for belated and revised returns from December 31, 2024, to at least January 15, 2025.
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