Section 87A rebate cannot be denied for long-term capital gains where income stays within the prescribed threshold.

Section 87A rebate for assessment year 2024-25 could not be denied merely because the assessee included long-term capital gains taxed at special rates or filed the return under the new tax regime under section 115BAC(1A). The provision was read on its plain terms, and no exclusion for long-term capital gains was found for that year. The amendment made by Finance Act, 2024 was held inapplicable to assessment year 2024-25. As the assessee's total income remained within the prescribed threshold, the rebate claim was sustained and the denial by the lower authorities was set aside.

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Issues: Whether the assessee was entitled to rebate under section 87A of the Income-tax Act, 1961 for assessment year 2024-25 despite inclusion of long-term capital gains taxed at special rates and the return being filed under the new tax regime under section 115BAC(1A).

Analysis: The rebate provision in section 87A was read on its plain terms, and no exclusion of any category of income, including long-term capital gains, was found in the language governing the relevant assessment year. The disallowance based on the assessee having filed a return under section 115BAC(1A) was rejected as not determinative for the year in question, and the amendment introduced by Finance Act, 2024 was held inapplicable to assessment year 2024-25. The computation of total income within the prescribed threshold was, therefore, held sufficient to sustain the rebate claim.

Conclusion: The assessee was entitled to rebate under section 87A, and the denial by the lower authorities was set aside.

Ratio Decidendi: Where the statutory language granting a rebate is clear and does not exclude a particular category of income, the rebate cannot be denied if the assessee's total income remains within the prescribed threshold for the relevant assessment year.

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