Taxpayers Rejoice: ITAT Chandigarh Grants Key Rebate on Debt Mutual Fund LTCG

• ITAT Chandigarh ruled that Section 87A tax rebate applies to Long Term Capital Gain (LTCG) from debt mutual funds.
• This decision overturns the Income Tax Department's denial, canceling a tax demand of ₹25,710 for a taxpayer from Ambala.
• The Tribunal clarified that Section 87A restrictions under Section 112A(6) only apply to LTCG from equity shares, equity-oriented mutual funds, and business trusts, not debt mutual funds (Section 112).
• Taxpayers previously denied this rebate for Financial Year 2024-25 or earlier can now seek relief through rectification or appeal.
• Note: From Assessment Year 2025-26, Section 87A benefit is abolished for special rate income under the new tax regime.

Why It Matters: ITAT Chandigarh's ruling ensures Section 87A rebate for LTCG on debt mutual funds, offering relief to taxpayers.