Since the Income Tax utility disabled the option to claim Section 87A tax rebate on short term capital gains (STCG) from listed equities in 2024, many taxpayers across the nation found themselves facing either a tax demand or some confusion. The Budget 2026 clarified things by stating that the Section 87A tax rebate does apply to special rate income like STCG. However, those who claimed it before this announcement, received a tax notice.
This article tells the story of a taxpayer from Thane who chose to challenge the Income Tax Department regarding the Section 87A issue and ultimately triumphed in the ITAT Mumbai.
