Many assessees have now received Intimation Orders on 24.02.2025 for demands

On February 24, 2025, the Income Tax Department issued several Intimation Orders, leaving taxpayers uncertain about their Section 87A rebate for Assessment Year (AY) 2024-25. Many individuals who previously expected tax relief are now facing unexpected tax demands. This has created significant confusion, and taxpayers are unsure about their next steps.

If you have received such an order and need assistance, our Income Tax Filing Services in Delhi can provide expert guidance. We will help you navigate the appeal process, ensuring that your tax rights are protected.

What’s happening?

A considerable number of taxpayers who filed their Income Tax Returns (ITR) for AY 2024-25 have encountered an issue related to the Section 87A rebate. The rebate, which is meant for eligible taxpayers with special rate incomes, was not applied during the return processing. However, taxpayers were allowed to claim it while filing their returns, making this sudden disallowance unexpected.

For those who received Intimation Orders in June 2024, the authorities later issued Rectification Orders on February 25, 2025, once again denying the 87A rebate for special rate incomes. The peculiar aspect of this situation is that the rebate was initially granted in the original notice, making the subsequent denial seem inconsistent.

How does this affect you?

• If you received an Intimation Order under Section 143(1) on February 24, 2025, you may have noticed an additional tax demand. This is primarily due to the authorities disallowing the 87A rebate. In such a case, you might have to appeal against this order to avoid unnecessary tax liabilities.
• Similarly, if you received a Rectification Order under Section 154, which affects your eligibility for the 87A rebate, you may also need to file an appeal.
• The core issue stems from the Income Tax Department updating its tax-filing utility in July 2024. This change disallowed the Section 87A rebate for special rate incomes under the New Tax Regime. Despite the Bombay High Court's ruling in The Chamber of Tax Consultants v. Director General of Income Tax (Systems) on January 24, 2025, taxpayers continue to face disallowance of the rebate.

What should you do next?

If you have received an Intimation Order or a Rectification Order demanding additional tax, follow these steps to protect your rights:

1. Verify your ITR filing details:

• Review your ITR submission and confirm whether the 87A rebate was correctly claimed.
• Compare your filed return with the intimation order to understand the discrepancies.

2. Consult an expert:

• Seek professional advice from an experienced Income Tax Consultant in Delhi.
• Our Delhi Income Tax Experts can analyze your case and suggest the best course of action.

3. File an appeal with CIT(A):

• If you believe the tax demand is incorrect, you can appeal to the Commissioner of Income Tax (Appeals) [CIT(A)].
• Your appeal should be based on the Bombay High Court’s ruling, which sided with taxpayers regarding utility-based rebate claims.

How can we help?

At Taxcrafted Solutions, we specialize in Income Tax Filing Services in Delhi and provide comprehensive support to taxpayers facing tax disputes. Our team of experts can assist you with:

• Filing appeals under Sections 143(1) and 154.
• Handling rectification requests and reassessment cases.
• Providing personalized tax advice for salaried individuals, business owners, and capital gains investors.
• Offering a complete Income Tax Return filing service in Delhi.
• Guiding you through the latest Income Tax Calendar for 2025 to ensure timely compliance.

Why Choose Us?

• Experienced Tax Professionals: Our team has extensive experience handling tax disputes and appeals.
• Expert Legal Support: We ensure your appeal is backed by strong legal references, such as the Bombay High Court’s judgment.
• End-to-End Assistance: From Online Income Tax Filing in Delhi to representing you in appeals, we handle everything.
• Affordable and Transparent Pricing: No hidden fees—only expert tax solutions.

Commonly Asked Question:

What is Section 87A and who can claim it?

Section 87A provides a rebate for taxpayers with total taxable income below a specified limit. For AY 2024-25, individuals earning up to ₹7,00,000 under the New Tax Regime were eligible for the rebate. However, recent changes in the tax utility system have resulted in disallowance of this rebate for special rate incomes.

Can I still claim the rebate if I filed my ITR before the July 2024 utility change?

Yes, if you filed your return before the utility update in July 2024, you should be eligible for the rebate. However, if you received an Intimation Order denying the rebate, you may need to appeal the decision.

How long do I have to file an appeal?

You must file an appeal within 30 days from the date of receiving the intimation or rectification order. Delaying your response could lead to further complications, including penalties.

How can I check if my 87A rebate was denied?

You can log into the Income Tax e-Filing portal, download your Intimation Order (u/s 143(1)) or Rectification Order (u/s 154), and review the tax calculations. If the rebate is missing, you may have grounds to appeal.

What happens if I ignore the tax demand?

Ignoring an incorrect tax demand can result in:

• Additional interest and penalties.
• Legal notices from the tax authorities.
• Future tax return processing issues. It is advisable to act immediately to resolve the matter.

Conclusion

The recent surge in Intimation and Rectification Orders has caused distress among taxpayers, particularly due to the disallowance of the Section 87A rebate. If you have received an unexpected tax demand, taking prompt action is essential. Our expert Best Tax Consultants for Income Tax Filing in Delhi can help you handle tax disputes efficiently. We offer comprehensive solutions, from filing appeals to resolving tax notices, ensuring that you do not pay excess taxes unfairly. Need help with your Income Tax Return? Facing issues with appeals or tax notices? Contact us today for expert Income Tax Filing Assistance in Delhi and hassle-free tax solutions!