Interim Relief for Claiming Section 87A Rebate — AY 2024–25

Section 87A of the Income Tax Act, 1961 provides a rebate that significantly reduces or eliminates tax liability for eligible resident individuals. For AY 2024–25 the rebate operated under both tax regimes: under the old regime residents with total income up to ₹5,00,000 were eligible for rebate up to ₹12,500 (zero tax effectively), while under the new regime (s.115BAC(1A)) individuals with total income up to ₹7,00,000 were eligible for rebate up to ₹25,000. Administrative, portal or processing errors that prevent taxpayers from obtaining the rebate create the practical problem of unjust tax demands — the source document addresses how interim relief mechanisms bridge this gap. :contentReference[oaicite:3]{index=3}

For AY 2024–25 the rebate continued under both regimes. Under the old tax regime the threshold was total income up to ₹5,00,000 with rebate up to ₹12,500; under the new tax regime the threshold was total income up to ₹7,00,000 with rebate up to ₹25,000. Since the rebate directly reduces tax payable, denial through technical or clerical reasons produces an unintended tax burden. Interim relief mechanisms ensure taxpayers are not forced to pay tax that the statute does not require. :contentReference[oaicite:4]{index=4}

• Portal or system-generated errors: e-filing computation failures that produce erroneous demands.
• Error in selecting tax regime: mistaken selection of old/new regime leading to lost rebate entitlement.
• Incorrect adjustment during processing under s.143(1): CPC mismatches or auto-adjustments causing denied rebate.
• Cases under scrutiny or assessment: AO denial of rebate during assessment where interim stay prevents harsh recovery pending resolution.

In these cases interim relief reduces immediate financial strain while allowing merits to be adjudicated. :contentReference[oaicite:7]{index=7}

Writ Jurisdiction

Where systemic errors, portal malfunction, or denial without reasons occur, High Courts may exercise writ jurisdiction to grant interim relief, particularly to prevent irreversible hardship. Courts have emphasised that taxpayers should not be penalised due to administrative failures. :contentReference[oaicite:10]{index=10}

Court principles relevant to interim relief include: substantive rights prevail over procedural technicalities; revenue should not collect tax contrary to clear legislative intent; stays are appropriate where recovery causes disproportionate hardship; and portal malfunctions cannot be permitted to prejudice taxpayers. These principles support interim relief in bona fide 87A disputes. :contentReference[oaicite:11]{index=11}

1. Section 154 rectification: File an online rectification for manifest computational errors (fastest route).
2. Appeal & stay (s.220(6), s.246A): If rectification fails, file appeal and apply for stay of demand.
3. Escalation: Seek intervention from Principal CIT or NFAC for administrative resolution if AO refuses stay.
4. Writ petition: File High Court writ where denial is arbitrary or system-based and other remedies are exhausted or impractical.

Documentation (Form 16, salary statements, e-file screenshots, CPC orders) is key for provisional relief. :contentReference[oaicite:12]{index=12}

• Total income clearly below rebate threshold (₹5L/₹7L).
• Rebate auto-populated incorrectly due to portal/CPC error.
• Employer/FORM 16 evidence demonstrating eligibility.
• Denial without speaking order or any reasons.
• Processing error under Section 143(1) resulting in erroneous demand.

These grounds form the backbone of most interim relief petitions. :contentReference[oaicite:13]{index=13}

Section 87A is designed to shield low-income taxpayers. When denial stems from administrative mistakes, collecting tax contrary to statute is unjust. Interim relief preserves taxpayers’ cash flows, prevents undue hardship, and permits the administration to correct errors without causing irreversible harm. This aligns with broader principles of fairness and efficient tax administration. :contentReference[oaicite:14]{index=14}

• If actual total income exceeds rebate limits, relief will be refused.
• If concealment or misreporting is alleged, relief is unlikely.
• Interim relief is provisional — merits determination may still deny rebate.
• Authorities may request partial deposits in exceptional situations.

These limits ensure interim protection is not misused. :contentReference[oaicite:15]{index=15}

Interim relief mechanisms (rectification under s.154, appellate stay, writ jurisdiction) are crucial safeguards when Section 87A rebate is wrongly denied for AY 2024–25. Rectification is usually the fastest remedy for computational errors, while appellate and writ remedies protect taxpayers in more complex or systemic situations. Ultimately, interim relief reconciles legislative intent—protecting low-income taxpayers—with the realities of occasionally fallible administrative processes. Practitioners should document eligibility, pursue rectification first, and escalate to appellate or judicial forums where necessary. :contentReference[oaicite:16]{index=16}