ITAT Delhi: Full ₹25,000 Section 87A rebate allowed against STCG for AY 2025-26
The Income Tax Appellate Tribunal (ITAT) Delhi has ruled that taxpayers can claim the complete ₹25,000 Section 87A rebate against the tax on short-term capital gains computed under Section 111A for the assessment year 2025-26.
The tribunal notes that the Finance Act 2025 introduces a restriction on special-rate income, but that restriction is applicable only from AY 2026-27 onward, leaving AY 2025-26 unaffected.
As a result, taxpayers in AY 2025-26 can use the full 87A rebate to offset their STCG liability, potentially reducing the tax payable.
The ruling offers guidance for cases involving short-term gains on listed securities, though it remains a tribunal decision and can be subject to appeal or alteration in higher courts.
- Full ₹25,000 87A rebate against STCG under 111A allowed for AY 2025-26, per ITAT Delhi.
- Finance Act 2025 restricts special-rate income starting from AY 2026-27.
- Impact: taxpayers can optimize tax liability for AY 2025-26 before the later restriction takes effect.
- Note: ITAT rulings may be persuasive but are not binding precedent in all cases.
