Section 87A rebate applies to resident taxpayers under the new regime even with short-term capital gains under section 111A.

Rebate under section 87A was held allowable for a resident individual opting for section 115BAC(1A) where total income did not exceed the prescribed limit and included short-term capital gains taxable under section 111A. The statutory scheme for assessment year 2024-25 contained no express bar in section 87A or section 111A excluding rebate on tax attributable to such gains, and the absence of a specific exclusion comparable to section 112A supported the claim. A later prospective amendment could not be applied to deny the benefit for the relevant year, and automated denial could not override the statute.

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Issues: Whether rebate under section 87A of the Income-tax Act, 1961 is available to a resident individual opting for section 115BAC(1A) where total income does not exceed Rs. 7,00,000 and the income includes short-term capital gains taxable under section 111A.

Analysis: The statutory scheme, as applicable for assessment year 2024-25, did not contain any express bar in section 87A or section 111A denying rebate on tax attributable to short-term capital gains. The amended first proviso to section 87A applied to resident individuals assessed under section 115BAC(1A) whose total income did not exceed the prescribed limit, and the absence of a specific exclusion comparable to section 112A supported allowance of the rebate. The subsequent prospective amendment could not be used to deny the benefit for the relevant year, and automated denial by the processing system could not override the statute.

Conclusion: Rebate under section 87A was allowable for assessment year 2024-25 even though the income included short-term capital gains taxable under section 111A; the tax demand was deleted and the appeal was allowed.

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