Section 87A rebate on short-term capital gains tax under section 111A was available for AY 2024-25 under the earlier law.

Rebate under section 87A for Assessment Year 2024-25 was analysed as available against tax attributable to short-term capital gains taxed under section 111A where the resident individual's total income stayed within the prescribed threshold and section 115BAC(1A) was opted. The text states that, for that year, section 87A contained no express exclusion for special-rate income under Chapter XII, including such capital gains, while the legislature had used express exclusions elsewhere, such as section 112A(6). It further notes that the Finance Act, 2025 amendment excluding special-rate income operated prospectively, confirming that the earlier law allowed the rebate on section 111A tax.

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Issues: Whether rebate under section 87A of the Income-tax Act, 1961 is available against tax attributable to short-term capital gains chargeable under section 111A for Assessment Year 2024-25, where the assessee has opted for section 115BAC(1A) and the total income is within the prescribed threshold.

Analysis: Section 87A, as applicable for the relevant assessment year, is a beneficial provision granting rebate to a resident individual whose total income does not exceed the prescribed limit. For Assessment Year 2024-25, the provision did not contain any express exclusion denying rebate in relation to tax on income chargeable at special rates under Chapter XII, including short-term capital gains under section 111A. The statutory scheme showed that when the legislature intended to deny rebate for a particular category of income, it did so expressly, as seen in section 112A(6). The later amendment by the Finance Act, 2025, which expressly excluded such special rate income, was prospective and therefore confirmed that the earlier law did not contain that restriction.

Conclusion: Rebate under section 87A was held to be admissible on the tax payable on short-term capital gains under section 111A for Assessment Year 2024-25, and the assessee was entitled to the rebate claimed.

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