Rebate under section 87A extends to tax on short-term capital gains under section 111A when statutory conditions are met.

Rebate under section 87A was considered available against tax payable on short-term capital gains taxed under section 111A for an individual opting for section 115BAC, where the assessee's total income remained below the rebate threshold and the statutory conditions for section 87A were otherwise satisfied. The Tribunal followed consistent co-ordinate bench decisions and noted that no contrary binding authority was shown. On that basis, denial of the rebate against tax computed at the special rate on such capital gains was held unsustainable, and the rebate was directed to be granted.

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Issues: Whether rebate under section 87A of the Income-tax Act, 1961 is allowable against tax payable on short-term capital gains taxable under section 111A of the Income-tax Act, 1961 for an individual assessee opting for section 115BAC of the Income-tax Act, 1961.

Analysis: The assessee's total income was below the threshold for rebate and the denial arose only in relation to tax computed at the special rate on short-term capital gains. The Tribunal noted that consistent co-ordinate bench decisions had held such rebate to be available where the statutory conditions for section 87A were otherwise satisfied, and no contrary binding authority was shown.

Conclusion: The denial of rebate under section 87A on tax payable under section 111A was held to be unsustainable, and the assessee was directed to be granted the rebate.

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