Section 87A rebate remains available despite section 111A capital gains where the income threshold is satisfied under the unamended law.

For Assessment Year 2024-25, section 87A rebate is stated to remain available to a resident individual assessed under section 115BAC(1A) where total income does not exceed Rs. 7,00,000, even if part of the income is short-term capital gains taxed under section 111A. The text notes that the provision contains no express exclusion for special-rate income, and that the subject-to clause in section 115BAC(1A) and a later proposed amendment do not override the plain wording of the unamended law. On that basis, denial of rebate on a system-driven basis was treated as unsupported by statute.

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Issues: Whether a resident individual assessed under section 115BAC(1A) and having total income not exceeding Rs. 7,00,000 is entitled to rebate under section 87A against tax payable on short-term capital gains taxable under section 111A for Assessment Year 2024-25.

Analysis: The rebate provision in section 87A, as applicable for Assessment Year 2024-25, contains no express exclusion for income chargeable under section 111A. The statutory scheme does not distinguish between normal income and special-rate income for denying rebate where the total income threshold is satisfied. The reliance placed on the subject-to clause in section 115BAC(1A) and on subsequent proposed amendment was held insufficient to curtail the plain language of the unamended provision applicable to the year in question. The denial of rebate on a system-driven basis was found to be unsupported by statute.

Conclusion: The assessee was held entitled to rebate under section 87A even though the income included short-term capital gains taxable under section 111A, and the disallowance of rebate was set aside.

Final Conclusion: The appeal succeeded and the tax demand arising from denial of rebate was deleted.

Ratio Decidendi: In the absence of an express statutory bar, rebate under section 87A cannot be denied to a resident individual satisfying the income threshold merely because part of the income is taxed at a special rate under section 111A while the assessee is assessed under section 115BAC(1A).

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