2026 (9) TMI 925

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....s appeal is filed by the assessee against the order passed by the ld. Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi [for short 'ld. CIT (A)] dated 14.03.2026 for the Assessment Year 2025-26. 2. At the time of hearing, ld. AR submitted that the issue involved in the present appeal is whether rebate u/s 87A of the Income Tax Act, 1961 (for short 'the Act') is ....

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.... that the restriction on Section 87A rebate for special-rate income was introduced only by the Finance Act 2025, prospectively w.e.f. AY 2026-27 and the First proviso to Section 87A (inserted by Finance Act 2023, w.e.f. AY 2024-25) grants rebate to a resident individual under Section 115BAC(1A) whose total income does not exceed Rs. 7,00,000/- without carving out any exclusion for income taxable u....

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....s 111A of the Act for the year under consideration i.e. AY 2025-26, where the assessee's total income i.e. Rs. 5,73,610/- is below Rs. 7,00,000 and tax is computed u/s 115BAC of the Act. I observed that while processing u/s 143(1), CPC restricted rebate u/s 87A from Rs. 25,000/- to Rs. 3,500/- by excluding tax on the STCG Component, raising a demand of Rs. 25,840/- (incl. interest). I further obse....