[BREAKING] S. 87A Rebate Issues: CBDT extends FY 2023-24 Belated/Revised Income Tax Return Filing Deadline

The Central Board of Direct Taxes ( CBDT ), supervising the Income Tax Department has extended the due date for filing of Income Tax Return by resident individuals to January 15, 2025 from the existing due date of December 31, 2024.

In the official circular dated December 31, 2024, the CBDT extended the deadline from December 31, 2024, to January 15, 2025, exclusively for resident individuals.  Recently, the Bombay High Court had directed the Central Board of Direct Taxes ( CBDT ) to extend the deadline for filing Income Tax Returns ( ITRs ) to January 15, 2025, following a Public Interest Litigation ( PIL ) filed by The Chamber of Tax Consultants.

Read More: Bombay HC directs CBDT to Extend ITR Deadline amid Section 87A Rebate Issue

The division bench comprising Chief Justice Devendra Kumar Upadhyaya and Justice Amit Borkar had noted that recent modifications to the Income Tax Department’s utility software prevented eligible taxpayers from claiming the Section 87A rebate. 

This rebate allows individuals with taxable incomes up to ₹7 lakh to receive a 100% tax rebate, effectively reducing their tax liability to zero. The PIL, argued by senior advocate Percy Pardiwala, contended that the modifications were arbitrary and deprived taxpayers of their statutory rights. 

The petitioner had contended that Section 87A rebate is an inherent right under the Income Tax Act and cannot be curtailed by software changes. It further urged the court to direct the CBDT to allow affected taxpayers to file revised returns under Section 139(5) of the Act, enabling them to claim the rebate retroactively.

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The extension comes under the powers conferred by Section 119 of the Income Tax Act, 1961. It applies to the belated returns filed under Section 139(4) and revised returns filed under Section 139(5) of the Act. This move is expected to benefit individuals who may have faced challenges in meeting the earlier deadline and claiming the rebate.

The additional 15 days offer much-needed relief to taxpayers, especially those dealing with complexities surrounding the Section. 87A rebate. This rebate is crucial for resident individuals with taxable income not exceeding ₹5,00,000, as it provides significant tax savings by reducing the tax liability to zero. The extension will help individuals rectify errors, file pending returns, or revise previously submitted returns without facing penalties.

Taxpayers are encouraged to utilize this extension proactively to complete their filings and avoid last-minute rushes. For assistance, individuals can reach out to certified tax professionals such as Chartered Accountants (CA) or consult the Income Tax Department's online resources.

Read More: 

Rebate u/s 87A on STCG from Shares Allowed under New Tax Regime: CIT(A) directs JAO to Verify Claim Again [Read Order]

CIT(A) Ruling Brings Relief on Income Tax Rebate under Section 87A to STCG Earners

ITRs filed under New Tax Regime get demand notice for taking Section 87A Rebate

With only two weeks added to the original deadline, taxpayers must act promptly to reap benefit from this extended timeline.

To Read the full text of the Order CLICK HERE

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