It was informed that many income tax taxpayers are receiving intimation orders with demands from the income tax department in the last 4 to 5 days.
Recently, the Department of Income tax issued demand notices to taxpayers on capital gain income without providing rebate under section 87A after processing their income tax returns.
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CA Himank Singla in his recent tweet mentioned this matter, “Many clients have started receiving Intimation Orders with Demands in the last 4-5 days! At the time of filing of ITR, 87A Rebate was allowed to assessees in the New Regime. Government brought changes in Utility in the month of July by not allowing 87A rebate against Special Rate incomes in the New Regime Such ITRs which took benefit of 87A in the New Regime are now being processed – WITH A DEMAND – to pay taxes without allowing Rebate u/s 87A! The sad part? You can’t switch to Old Regime in Revised ITR – hence, you don’t have any other option than to pay taxes on such Special Rate incomes !! Is this really logical and is this really ease of doing business ?”
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The government introduced a new tax regime in 2020 alongside the existing one, offering lower income tax rates but without the benefits of most deductions and exemptions available in the old regime. Taxpayers have the choice to opt for either regime depending on their financial situation and preferences. The new regime is meant to simplify taxation, while the old regime offers more savings options through exemptions.
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