Missed your Tax Rebate in July 2024? File a Revised ITR by January 15 to Claim it

Good news for taxpayers who missed claiming the rebate under Section 87A of the Income Tax Act in July 2024.

The Income Tax Department has announced plans to update the tax return filing utilities for ITR 2 and ITR 3.

Once updated, taxpayers will have the opportunity to claim the rebate they missed.

Special Rebate in the New and Old Income Tax Regimes

Under the old income tax regime, taxpayers with an annual income of up to ₹5 lakh are eligible for a rebate of ₹12,500.

Similarly, under the new income tax regime, taxpayers can claim a rebate of up to ₹25,000.

However, during the income tax return filing in July last year, many taxpayers missed out on availing this rebate.

For instance, if a taxpayer earned ₹5 lakh as salary income and had a short-term capital gain of ₹2 lakh from share sales in FY24, they would still be eligible for a tax rebate under Section 87A.

Many taxpayers missed out on claiming the special rebate in July

If a taxpayer filed their return before July 5, 2024, they received the rebate benefit.

However, due to a software update after July 5, such taxpayers were denied the rebate on short-term capital gains.

As a result, they also missed out on the rebate for the salary portion of their total income.

Despite requests from chartered accountants and taxpayers, the Income Tax Department did not provide any relief.

On December 20, the Bombay High Court directed the Income Tax Department to allow at least 15 days to provide relief.

The deadline to file belated returns has been extended to January 15

Following the Bombay High Court’s order, the Income Tax Department has extended the deadline for filing belated and revised returns to January 15.

The department also announced that it will soon update the utilities for ITR 2 and ITR 3.

This update allows taxpayers who missed the rebate in July 2024 to claim it by January 15.

However, this will not be automatic, and taxpayers must revise their returns by January 15 to avail of the rebate.

You can still revise your return even if you have received a refund

If your return has been processed and you’ve either received a refund or paid extra tax, you can still revise your income tax return by January 15.

Experts believe that many taxpayers will benefit from the Income Tax Department’s extension of the deadline for filing belated or revised returns.

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