Here in this video we are discussing a case

Favourable Case for Rebate u/s 87A on Short-Term Capital Gains
Rebate under Section 87A


She claimed a rebate of Rs.20,010 under Section 87A because her total income was under Rs.7,00,000. However, the Centralized Processing Centre (CPC) restricted the rebate to Rs.10,250, disallowing the rebate on STCG. This led to a reduced refund amount, prompting the taxpayer to file an appeal. This issue has arisen for most of the taxpayers who have filed their return under New Tax Regime under 115BAC. There was a lot of discussion and confusion among lot of taxpayers whether rebate would be available or not.

The taxpayer made several strong arguments citing the Finance Act, 2023, which allows rebate on total income, excluding only LTCG taxed under Section 112A. Since STCG is part of total income, it qualifies for the rebate if the total income doesn't exceed Rs.7,00,000. Whereas Centralized Processing Centre (CPC) while processing the return had not allowed the rebate on Short Term Capital Gains, which was contrary to the law.

The CIT (Appeals) ruled in favour of the taxpayer. Here's what the decision stated: The Finance Act, 2023, permits a rebate on total income (excluding LTCG under Section 112A) if the total income is within Rs.7,00,000. The restriction by CPC was incorrect. The ruling confirms that short-term capital gains, unlike long-term capital gains under Section 112A, are eligible for rebate if the total income is under Rs.7,00,000.


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