Govt Whets Greed In Short Term Gains With Pain Trails

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PIL In Gujarat HC Against Short Term Gain Rebate Tweak

By Raisina Correspondent

New Delhi, October 16: A homemaker with no income but modest short capital gains received a tax demand from the Income Tax Department. Her total income for the last fiscal was below ₹3 lakh.

She is not alone, for an association of the chartered accountants has moved court against the IT Department for “playing clever with software rejig after filing of the returns”. Those who had filed returns in July are now receiving additional tax demands, claimed a Ghaziabad-based CA.

“The rebate was allowed at the time of filing of returns on the tax filing portal in the new tax regime. But after the due date got over, the rebate feature from the portal was removed. Now, demands are being issued even while rebate was being allowed at the time of filing of returns,” he added.

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A large number of people who had filed returns in the first week of July also find that their returns have not yet been processed. “Refund of the people, who genuinely wait for their hard-earned money to be given back by the government, is blocked by way of not processing the returns,” said a Noida-based CA.

Chintan N. Patel, a CA, has moved the Gujarat High Court “to challenge Section 87A Rebate denial and unjust demand raised by the government”.

“A PIL has been filed, tackling the critical issue faced by many taxpayers and CAs regarding the rebate u/s 87A under the new tax regime. Due to a glitch in the government’s tax utility, which allowed the rebate until July 5th, several demand notices have been issued, causing confusion and undue hardship,” said Patel on X, while giving a backdrop to filing of the PIL.

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In this year’s Budget, Union Minister for Finance Nirmala Sitharaman had shown an extra zeal to sting the stock market participants. She had raised the taxes on stock trade instruments.

“The government should not have allowed the rebate feature on the portal at time of filing of returns for short term gains in the new tax regime. By applying the denial of the rebate post-facto, after filing of the returns, the people have been trapped. They cannot file revised return in old tax regime,” said the CA.

The e-filing of income tax portal features phone numbers of help desk but the executives are of least help to the aggrieved people. “I tried calling the given numbers. No one picks the phone,” said a working professional, who is still waiting for refund even after more than a month of processing of returns.

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Until last year, refund was credited into back accounts within hours of the receipt on e-mail of the processing of the income tax returns. “The government has just allowed the people being harassed by way of the change of heart in allowing rebate on short term gains first and then removing. Now, all the returns are being lensed to see if demands for taxes could be raised against them. We have not seen such practices in past,” added the CA.

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