Section 87A rebate remains available under the new tax regime despite special-rate short-term capital gains within the income threshold.

Section 87A rebate is available to an individual who opts for the new tax regime under section 115BAC(1A) where total income remains within the prescribed threshold, notwithstanding short-term capital gains taxable at special rates under section 111A. Section 115BAC(1A) contains no express exclusion of the rebate, and it should not be denied mechanically during processing under section 143(1) solely because of the new-regime election or special-rate income. The stated analysis recognises entitlement to the rebate for Assessment Year 2024-25 in these circumstances.

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Issues: Whether an individual opting for the new tax regime under section 115BAC(1A), whose total income is within the prescribed threshold, is entitled to rebate under section 87A notwithstanding tax on short-term capital gains under section 111A.

Analysis: Section 115BAC(1A) contains no express exclusion of the section 87A rebate. The statutory rebate cannot be mechanically denied at the stage of processing under section 143(1) merely because the assessee opted for the new tax regime or had income taxable at special rates. The applicable judicial decisions recognised entitlement to the rebate for Assessment Year 2024-25 where total income does not exceed the prescribed threshold.

Conclusion: The assessee was entitled to rebate under section 87A, and the Assessing Officer was directed to grant it.

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