The Income Tax Department has updated the Excel utilities for Income Tax Return (ITR) Forms 2 and 3, enabling eligible taxpayers to claim the Section 87A tax rebate for the Assessment Year 2024-25. This update addresses issues faced by taxpayers who were previously unable to claim the rebate due to software limitations.
Key Details:
- Section 87A Tax Rebate: Eligible taxpayers with income up to ₹5 lakh under the old tax regime can claim a rebate up to ₹12,500, and those with income up to ₹7 lakh under the new tax regime can claim a rebate up to ₹25,000.
- Manual Entry Required: Tax experts have noted that taxpayers must manually enter the rebate amount in the designated field of the Excel utility. The auto-fill function does not populate this field, and failure to enter the amount manually may result in the rebate not being applied.
- Pending Updates: While the Excel utilities have been updated, the HTML utilities for online filing are yet to be released. Taxpayers preferring online submission should monitor the Income Tax Department’s official portal for further updates.
Background:
In July 2024, changes to the ITR software prevented eligible taxpayers from claiming the Section 87A rebate, leading to tax demand notices for some. The Bombay High Court intervened, directing the Income Tax Department to extend the deadline for filing revised and belated ITRs to January 15, 2025, allowing affected taxpayers to rectify their returns.
Steps to Claim the Rebate:
- Download Updated Excel Utility: Access the latest version of the Excel utility for ITR Forms 2 or 3 from the Income Tax Department’s official website.
- Enter Relevant Details: Complete the ITR form with accurate income and deduction information.
- Manually Input Rebate Amount: In the designated field for Section 87A rebate, manually enter the eligible rebate amount.
- Validate and Submit: After entering all necessary information, validate the form to check for errors, generate the XML file, and upload it through the e-filing portal.
Expert Advice:
Tax professionals advise taxpayers to carefully review their eligibility for the Section 87A rebate and ensure manual entry of the rebate amount in the updated Excel utility. Staying informed about further updates from the Income Tax Department, especially regarding the release of HTML utilities for online filing, is also recommended.
Conclusion:
The update to the ITR forms is a positive development for eligible taxpayers seeking to claim the Section 87A rebate. However, attention to detail is crucial, particularly the manual entry of the rebate amount, to ensure the rebate is applied correctly. Taxpayers should complete and submit their revised or belated returns by the extended deadline of January 15, 2025.