This blog explains why taxpayers with capital gains are receiving Section 87A rebate notices. Learn about eligibility, common mistakes, and how to respond to income tax notices effectively.

The Union Budget 2025 included a tax credit for yearly incomes up to Rs 12 lakh, however capital gains are excluded. This blog examines the refund, its exclusions, and ways for maximizing tax savings.

One significant change brought about by the recent alteration to Section 87A of the Income Tax Act is the removal of the rebate on special rate incomes, such as short-term and long-term capital gains. The Bombay High Court formerly permitted the refund even for earnings with special rates, but this has now been reversed. Even if their total income is less than ₹7 lakh, taxpayers who make capital gains will now be required to pay tax at certain rates. The changes, their effects, and tax preparation techniques are examined in this blog.

The Income Tax Department (ITD) has started sending SMS alerts to taxpayers who have claimed Section 80GGC deductions for donations made to political parties and electoral trusts. The notice applies to Assessment Years 2022-23, 2023-24, and 2024-25 and urges taxpayers to verify their claims on the Compliance Portal. If the claim is incorrect, taxpayers must file an Updated Return (ITR-U) under Section 139(8A) before 31st March 2025 to avoid penalties under Section 270A (up to 200% fine) and interest under Section 234F (₹5,000 late fee). This blog explains Section 80GGC deductions, compliance requirements, and the steps to correct errors in tax filings.

The Income Tax Department's (ITD) capricious limitations on Section 87A refund applications have been invalidated by the Bombay High Court. The court decided that it was unreasonable for qualified taxpayers to be denied refunds due to technical constraints. Many people who were previously refused tax relief because of technical limitations now benefit from this ruling. To guarantee that rebate claims are handled efficiently, ITD must now modernize its systems. In order to get any refunds to which they are entitled, taxpayers should verify their status.

To provide aid to taxpayers, the Income Tax Department has extended the deadline for filing the ITR until January 15, 2025. Those revising special rate incomes or fixing Section 87A rebate issues will especially benefit from this prolongation. Find out how to take advantage of this chance, avoid penalties, and file amended taxes.

This article provides comprehensive insights into the recent amendments to income tax regulations for the fiscal year 2024-25. It covers changes in slab rates, rebate limits, surcharge rates, and other important aspects that taxpayers need to be aware of for effective tax planning.