Last opportunity for eligible taxpayers to claim 87A tax rebate: Why you must file revised/belated ITR before January 15, 2025
tax rebate issue is of special interest and debate among taxpayers. The issue became so contentious that multiple court cases were filed against the tax department’s decision to deny eligible taxpayers the benefit of 87A tax rebate. The tax department seems to have taken a stance that if special rate incomes like short term capital gains income exists in the ITR then that ITR cannot claim 87A tax rebate. This stance however was not properly communicated to taxpayers and changes were made to the ITR processing software suddenly on July 5, 2024, which is what caused the whole 87A tax rebate mess.
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Missing the January 15, 2025 revised ITR filing deadline can mean losing out tax refund in 87A cases
Only those eligible taxpayers who had to pay extra income tax due to denial of 87A tax rebate will now get a tax refund if they file a revised ITR on or before January 15, 2025.
The Central Board of Direct Taxes (CBDT) extended the revised and belated ITR filing deadline to January 15, 2025 from December 31, 2024. Missing this deadline can mean you lose the opportunity to claim 87A tax rebate. This is because after January 15, 2025 only ITR-U can be filed which does not permit tax refunds. ITR-U (updated ITR) is used to disclose previously undisclosed incomes, etc by paying a penal tax amount of 25% or 50%.
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