Bombay High Court Directs IT Department to Allow Section 87A Rebate for Eligible Taxpayers

The Bombay High Court has directed the Income Tax Department to amend its online filing utility to allow eligible taxpayers earning up to ₹7 lakh to claim the Section 87A rebate of ₹12,500 for the 2024-25 and beyond assessment year.

A PIL by the Chamber of Tax Consultants challenged a software update restricting rebate claims and this change violated their constitutional rights under Articles 14, 19(1)(g) and 265 (no tax without the authority of law). 

The Court deemed the restriction unconstitutional, emphasizing that eligibility for such claims should be examined during the assessment process under Sections 143(1) and 143(3).

The Court rejected manual filing requests but stressed technology should not hinder access to lawful tax benefits.