Section 87A rebate on long-term capital gains remains available when total income qualifies under the new tax regime.

Section 112A(6) permits a section 87A rebate where total income under the new tax regime includes long-term capital gains. The rebate is calculated with reference to income tax on total income after reducing the tax payable on those gains. The relevant threshold concerns the tax computed on long-term capital gains, rather than the full amount of such gains. Accordingly, denial of the rebate on that basis was incorrect, and the rebate was available against tax liability on the long-term capital gains.

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Issues: Whether an assessee whose total income under the new tax regime does not exceed Rs. 7 lakh may claim rebate under section 87A against tax payable on long-term capital gains.

Analysis: Section 112A(6) permits rebate under section 87A where total income includes long-term capital gains, with the rebate being computed from income tax on total income reduced by tax payable on such gains. The relevant threshold concerns the amount of tax calculated on the long-term capital gains, not the entire amount of long-term capital gains. The lower authority therefore incorrectly sustained denial of the claimed rebate.

Conclusion: Rebate under section 87A was allowable against the tax liability on the long-term capital gains; the issue was decided in favour of the assessee.

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