{"id":8359,"date":"2025-01-02T17:26:22","date_gmt":"2025-01-02T17:26:22","guid":{"rendered":"https:\/\/www.caindelhiindia.com\/blog\/?p=8359"},"modified":"2025-08-05T12:15:32","modified_gmt":"2025-08-05T12:15:32","slug":"section-87a-rebate-restored-via-itr-utility-update","status":"publish","type":"post","link":"https:\/\/www.caindelhiindia.com\/blog\/section-87a-rebate-restored-via-itr-utility-update\/","title":{"rendered":"Section 87A Rebate Restored via ITR Utility update"},"content":{"rendered":"<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-8362\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-02_22-56-58.jpg\" alt=\"87A\" width=\"1203\" height=\"493\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-02_22-56-58.jpg 1203w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-02_22-56-58-300x123.jpg 300w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-02_22-56-58-1024x420.jpg 1024w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-02_22-56-58-768x315.jpg 768w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-02_22-56-58-800x328.jpg 800w\" sizes=\"(max-width: 1203px) 100vw, 1203px\" \/><\/h2>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69db3f23d8999\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69db3f23d8999\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.caindelhiindia.com\/blog\/section-87a-rebate-restored-via-itr-utility-update\/#Section_87A_Rebate_Restored-_utility_update_disallowed_rebate_on_Special_Rate_Income\" title=\"Section 87A Rebate Restored- utility update disallowed rebate on Special Rate Income\">Section 87A Rebate Restored- utility update disallowed rebate on Special Rate Income<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.caindelhiindia.com\/blog\/section-87a-rebate-restored-via-itr-utility-update\/#Big_Update_on_Tax_Rebate_us_87A\" title=\"Big Update on Tax Rebate u\/s 87A\">Big Update on Tax Rebate u\/s 87A<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.caindelhiindia.com\/blog\/section-87a-rebate-restored-via-itr-utility-update\/#Rebate_us_87A_for_Short-Term_Capital_Gains_STCG_us_111A\" title=\"Rebate u\/s 87A for Short-Term Capital Gains (STCG) u\/s 111A\">Rebate u\/s 87A for Short-Term Capital Gains (STCG) u\/s 111A<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Section_87A_Rebate_Restored-_utility_update_disallowed_rebate_on_Special_Rate_Income\"><\/span><span style=\"color: #000080;\">Section 87A Rebate Restored- utility update disallowed rebate on Special Rate Income<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The Income Tax Department&#8217;s announcement about the updated utilities for ITR-2 and ITR-3 incorporating Section 87A rebate provisions is a notable development, especially for taxpayers dealing with income taxed at special rates such as Short-Term Capital Gains\u00a0 u\/s 111A and Long-term capital gains\u00a0 u\/s 112.<\/p>\n<p>ITR-2 &amp; ITR-3 3 (Excel-based Utility) has been updated.\u00a0However, JSON schema has still not been updated after 05.07.2024.\u00a0Here are the key takeaways of Circular No. 21 (dated December 31, 2024):<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-8377\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-07_23-17-54.jpg\" alt=\"TR-2 &amp; ITR-3 3 (Excel-based Utility) has been updated\" width=\"1102\" height=\"1280\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-07_23-17-54.jpg 1102w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-07_23-17-54-258x300.jpg 258w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-07_23-17-54-882x1024.jpg 882w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-07_23-17-54-768x892.jpg 768w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-07_23-17-54-800x929.jpg 800w\" sizes=\"(max-width: 1102px) 100vw, 1102px\" \/><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-8376\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-07_23-17-49.jpg\" alt=\"TR-2 &amp; ITR-3 3 (Excel-based Utility) has been updated.\" width=\"1064\" height=\"1280\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-07_23-17-49.jpg 1064w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-07_23-17-49-249x300.jpg 249w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-07_23-17-49-851x1024.jpg 851w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-07_23-17-49-768x924.jpg 768w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-07_23-17-49-800x962.jpg 800w\" sizes=\"(max-width: 1064px) 100vw, 1064px\" \/><\/p>\n<ul>\n<li>Revised Utilities for ITR-2 and ITR-3: The revised utilities are expected to simplify claiming the Section 87A rebate. These updates follow Circular No. 21 (dated December 31, 2024) and align with the Bombay High Court&#8217;s directive ensuring taxpayer rights.<\/li>\n<li>The updated utilities for ITR-2 and ITR-3 now enable taxpayers to claim Section 87A rebate on special rate income, addressing the issue caused by the earlier disallowance on July 5, 2024. The July 5, 2024, utility update had disallowed the rebate on special rate income, causing compliance challenges for eligible taxpayers. This update rectifies that issue. The updated utilities for ITR forms 2 and 3 giving effect to the Circular No. 21 dated 31\/12\/24 &amp; including the option to update 87A rebate will be made available shortly.<\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-8363\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/Section-87A-rebate.jpg\" alt=\"Section 87A rebate\" width=\"1280\" height=\"622\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/Section-87A-rebate.jpg 1280w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/Section-87A-rebate-300x146.jpg 300w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/Section-87A-rebate-1024x498.jpg 1024w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/Section-87A-rebate-768x373.jpg 768w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/Section-87A-rebate-800x389.jpg 800w\" sizes=\"(max-width: 1280px) 100vw, 1280px\" \/><\/p>\n<ul>\n<li>Revised and Belated Returns: Taxpayers can file or revise their returns using the updated utilities, benefiting from the extended deadline of January 15, 2025, as per Circular No. 21.<\/li>\n<li>Rebate under Section 87A: Available to taxpayers earning up to Rs. 5,00,000 taxable income (old regime) or Rs. 7,00,000 (new regime). Enables eligible individuals to reduce their tax liability to zero.<\/li>\n<li>Special Rates on Income: Provisions address Short-Term Capital Gains (Section 111A) and Long-term capital gains (Section 112), ensuring rebates can be claimed even for income taxed at these rates.<\/li>\n<li>Filing Extensions and Practical Benefits: Circular No. 21 extends the deadline for revised or belated returns to January 15, 2025, providing relief for taxpayers affected by processing delays. Income tax taxpayers with previously processed Income tax return\u2019s showing demand must file revised returns to claim the benefits.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Big_Update_on_Tax_Rebate_us_87A\"><\/span><span style=\"color: #000080;\"><strong>Big Update on Tax Rebate u\/s 87A<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The Income Tax Department had changed Excel Utility to Update the Rebate u\/s 87A but it doesn&#8217;t means Department had allowed Rebate u\/s 87A and that&#8217;s why the wording in the income tax portal were &#8220;The updated utilities for ITR Forms 2 and 3 to exercise the option to update 87A rebate for AY 2024-25 will be made available shortly.&#8221;<\/p>\n<p>Pic 1<br \/>\nThe Utility is calculating tax without giving rebate against special income as earlier but the tax payer can edit the rebate manually<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-8379\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-07_23-25-18.jpg\" alt=\"The Utility is calculating tax without giving rebate against special income as earlier but the tax payer can edit the rebate manually \" width=\"1146\" height=\"533\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-07_23-25-18.jpg 1146w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-07_23-25-18-300x140.jpg 300w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-07_23-25-18-1024x476.jpg 1024w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-07_23-25-18-768x357.jpg 768w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-07_23-25-18-800x372.jpg 800w\" sizes=\"(max-width: 1146px) 100vw, 1146px\" \/><\/p>\n<p>Pic 2<br \/>\nEdited the Rebate amount manually to the extent of tax<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-8380\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-07_23-26-23.jpg\" alt=\"Edited the Rebate amount manually to the extent of tax\" width=\"1147\" height=\"515\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-07_23-26-23.jpg 1147w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-07_23-26-23-300x135.jpg 300w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-07_23-26-23-1024x460.jpg 1024w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-07_23-26-23-768x345.jpg 768w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-07_23-26-23-800x359.jpg 800w\" sizes=\"(max-width: 1147px) 100vw, 1147px\" \/><\/p>\n<p>Pic 3<br \/>\nScreenshot of earlier utility where rebate amount was non editable<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-8381\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-07_23-27-09.jpg\" alt=\"Screenshot of earlier utility where rebate amount was non editable\" width=\"1146\" height=\"529\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-07_23-27-09.jpg 1146w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-07_23-27-09-300x138.jpg 300w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-07_23-27-09-1024x473.jpg 1024w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-07_23-27-09-768x355.jpg 768w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/01\/photo_2025-01-07_23-27-09-800x369.jpg 800w\" sizes=\"(max-width: 1146px) 100vw, 1146px\" \/><\/p>\n<p>&nbsp;<\/p>\n<h3 data-start=\"131\" data-end=\"219\"><span class=\"ez-toc-section\" id=\"Rebate_us_87A_for_Short-Term_Capital_Gains_STCG_us_111A\"><\/span><span style=\"color: #000080;\"><strong data-start=\"135\" data-end=\"219\">Rebate u\/s 87A for Short-Term Capital Gains (STCG) u\/s 111A<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"color: #000080;\"><strong>Important distinction between the Old and New Tax Regimes in relation to\u00a0<\/strong><\/span><\/p>\n<ul>\n<li data-start=\"98\" data-end=\"166\">Section 111A \u2013 Short-Term Capital Gains (STCG) on Equity: Applies to STCG on equity shares and equity-oriented mutual funds where STT is paid. &amp; Section 87A: Provides a rebate of up to INR 12,500 for resident individuals if the total income is up to INR 5 lakh. <span style=\"font-size: 16px;\">Applies to <\/span>short-term capital gains on equity shares<span style=\"font-size: 16px;\"> or <\/span>equity mutual funds<span style=\"font-size: 16px;\"> where <\/span>STT<span style=\"font-size: 16px;\"> (Securities Transaction Tax) has been paid. <\/span><span style=\"font-size: 16px;\">Tax rate: <\/span>15%<\/li>\n<li data-start=\"338\" data-end=\"370\">Section 87A \u2013 Rebate: <span style=\"font-size: 16px;\">Available to a <\/span>resident individual<span style=\"font-size: 16px;\"> whose <\/span>total income does not exceed INR 5,00,000<span style=\"font-size: 16px;\">. <\/span><span style=\"font-size: 16px;\">Maximum rebate allowed: INR <\/span>12,500 &amp; <span style=\"font-size: 16px;\">Rebate is <\/span>against the total tax liability<span style=\"font-size: 16px;\"> (excluding certain income types under new regime).<\/span><\/li>\n<\/ul>\n<p><span style=\"color: #000080;\"><strong>Rebate u\/s 87A on STCG u\/s 111A:<\/strong><\/span><\/p>\n<div class=\"_tableContainer_16hzy_1\">\n<div class=\"_tableWrapper_16hzy_14 group flex w-fit flex-col-reverse\" tabindex=\"-1\">\n<table class=\"w-fit min-w-(--thread-content-width)\" data-start=\"647\" data-end=\"1189\">\n<thead data-start=\"647\" data-end=\"781\">\n<tr data-start=\"647\" data-end=\"781\">\n<th data-start=\"647\" data-end=\"671\" data-col-size=\"sm\"><strong data-start=\"649\" data-end=\"663\">Tax Regime<\/strong><\/th>\n<th data-start=\"671\" data-end=\"702\" data-col-size=\"sm\"><strong data-start=\"673\" data-end=\"701\">Rebate on STCG u\/s 111A?<\/strong><\/th>\n<th data-start=\"702\" data-end=\"781\" data-col-size=\"md\"><strong data-start=\"704\" data-end=\"715\">Remarks<\/strong><\/th>\n<\/tr>\n<\/thead>\n<tbody data-start=\"918\" data-end=\"1189\">\n<tr data-start=\"918\" data-end=\"1053\">\n<td data-start=\"918\" data-end=\"942\" data-col-size=\"sm\"><strong data-start=\"920\" data-end=\"938\">Old Tax Regime<\/strong><\/td>\n<td data-start=\"942\" data-end=\"973\" data-col-size=\"sm\">Available<\/td>\n<td data-col-size=\"md\" data-start=\"973\" data-end=\"1053\">Rebate under 87A is allowed even if the income includes STCG taxable @15%.<\/td>\n<\/tr>\n<tr data-start=\"1054\" data-end=\"1189\">\n<td data-start=\"1054\" data-end=\"1078\" data-col-size=\"sm\"><strong data-start=\"1056\" data-end=\"1074\">New Tax Regime<\/strong><\/td>\n<td data-col-size=\"sm\" data-start=\"1078\" data-end=\"1109\">Not Available<\/td>\n<td data-col-size=\"md\" data-start=\"1109\" data-end=\"1189\">STCG under 111A taxed separately @15%. Rebate not allowed on this component.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n<ul data-start=\"320\" data-end=\"553\">\n<li data-start=\"320\" data-end=\"428\">\n<p data-start=\"322\" data-end=\"428\">Under the Old Regime, even if the income includes STCG under section 111A, rebate under 87A is available (subject to conditions).<\/p>\n<\/li>\n<li data-start=\"320\" data-end=\"428\">\n<p data-start=\"322\" data-end=\"428\">Under the New Regime, rebate under 87A is available, but not against tax on STCG u\/s 111A, because the preferential 15% tax rate applies separately, and the regime does not allow offsetting or rebate on that portion.<\/p>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Section 87A Rebate Restored- utility update disallowed rebate on Special Rate Income The Income Tax Department&#8217;s announcement about the updated utilities for ITR-2 and ITR-3 incorporating Section 87A rebate provisions is a notable development, especially for taxpayers dealing with income taxed at special rates such as Short-Term Capital Gains\u00a0 u\/s 111A and Long-term capital gains\u00a0 &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1035],"tags":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8359"}],"collection":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/comments?post=8359"}],"version-history":[{"count":5,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8359\/revisions"}],"predecessor-version":[{"id":9308,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8359\/revisions\/9308"}],"wp:attachment":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/media?parent=8359"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/categories?post=8359"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/tags?post=8359"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}