Before the hearing in Bombay High Court, Income Tax Department gives relief to taxpayers, updated ITR forms to get rebate

There is news of relief for those taxpayers who could not get tax rebate under section 87A while filing Income Tax Return for the financial year 2023-24 and assessment year 2024-25. To enable such taxpayers to get tax rebate by filing revised or belated returns again, the Income Tax Department has updated the offline and online utilities for ITR forms number 2 and 3. Using this option, taxpayers will now be able to get tax rebate under section 87A by going to the Income Tax portal and filing income tax return again for the assessment year 2024-25.

The Income Tax Department has shared this information on its online return filing portal and said that offline and online utilities have been updated for ITR Forms 2 and ITR Forms 3. According to the tax department, taxpayers can now avail this option by visiting the income tax portal for assessment year 2024-25 and filing revised or belated returns under section 87A to avail tax rebate.

The Bombay High Court, while hearing a PIL filed by The Chamber of Tax Consultants last month, had ordered that the date for filing income tax returns for taxpayers who could not avail tax rebate for the financial year 2023-24 and assessment year 2024-25 in July 2024 should be extended to January 15, 2025. The CBDT suddenly stopped giving tax rebate under section 87A to those taxpayers who filed income tax returns after July 5, 2024, even though they were entitled to it. The taxpayers approached the court and now the Bombay High Court gave this order in its interim decision. On January 9, 2025, the Bombay High Court will give its final decision in this matter.

From July 5, 2024, the tax department suddenly stopped giving tax rebate under section 87A on short term capital gains on equity shares or income from equity oriented mutual funds which is taxed at 15 percent in the income tax return filing utilities. This decision of the tax department was also heavily criticized. But after the intervention of the court, the tax department has updated the offline and online utilities so that taxpayers can get tax rebate.