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GST returns to become time-barred after 3 years starting July tax period
The July 2025 tax period means taxpayers will file monthly returns in August this year.
In an advisory, the Goods and Services Tax Network (GSTN) said taxpayers will not be able to file GSTR-1, GSTR 3B, GSTR-4, GSTR-5, GSTR-5A, GSTR-6, GSTR 7, GSTR 8 and GSTR 9 on expiry of three years from the filing due date. The amendments to Goods and Services Tax (GST) law with regard to time barring were effected through the Finance Act, 2023.
Thus, GST outward supply returns, besides returns related to payment of the liability, annual returns and tax collected at source will become time-barred.
"The returns will be barred for filing after expiry of three years. The said restriction will be implemented on the GST portal from the July 2025 Tax period," the GSTN advisory said.
It advised taxpayers to reconcile their records and file their GST returns as soon as possible if not filed till now.
Earlier in October, the GST Network (GSTN) alerted taxpayers that the said provision of tax barring would be implemented in early 2025.
AMRG & Associates Senior Partner Rajat Mohan said that while this step enhances system discipline and curtails prolonged non-compliance, it may severely impact taxpayers who, due to litigation, system issues, or genuine oversight, have pending filings.
"The absence of a redressal mechanism for exceptional cases could lead to permanent denial of Input Tax Credit and financial setbacks," Mohan said.
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Time of India
an hour ago
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Section 87A tax rebate can be claimed for short term capital gains income under new tax regime, rules ITAT Ahmedabad
Academy Empower your mind, elevate your skills Firstly, the Finance Bill 2025 itself proposes to insert new restrictions on rebate under Section 87A w.e.f. A.Y. 2026–27, which implies that the existing law (i.e., as applicable to A.Y. 2024–25) does not contain such a restriction. Secondly, the Explanatory Memorandum cannot override the plain language of the statute. It is a tool of interpretation, not a source of substantive law. Brief facts of the case ITAT Ahmedabad final judgement about Section 87A tax rebate on STCG "…we find that the assessee is a resident individual and the total income declared for the assessment year 2024–25 does not exceed Rs.7,00,000. It is also an admitted position that the assessee has exercised the option to be assessed under the new tax regime in accordance with the provisions of section 115BAC(1A). "On a plain reading of the statutory provisions, there exists no express bar either in section 87A or section 111A for denial of rebate in respect of tax payable on short-term capital gains arising from transfer of listed equity shares taxable at special rates under section 111A." "The legislative intent is further clarified by the subsequent amendment proposed in the Finance Bill, 2025, which is prospective in nature and thereby reinforces that no such restriction was in force during the relevant assessment year." "The denial of rebate under Section 87A by the CPC, Bengaluru, appears to be based solely on system-driven logic and not on any statutory mandate. Moreover, the interpretation adopted by the CIT(A) in upholding such denial is, in our considered view, not in consonance with the plain and unambiguous language of the law as applicable for A.Y. 2024–25." Legal reasonings used by ITAT Ahmedabad to arrive at this judgement Core issue of contention about Section 87A 'Whether a resident individual who has exercised the option under section 115BAC(1A) and whose total income is below Rs.7,00,000/-, is eligible to claim rebate under section 87A against tax payable on STCG under section 111A, in the absence of any express restriction in section 87A or section 111A.' ITAT Ahmedabad explains meaning of first proviso to Section 87A as inserted by Finance Act, 2023 The amended first proviso to section 87A [inserted by the Finance Act, 2023 w.e.f. A.Y. 2024–25] provides: 'Where the total income of the assessee is chargeable to tax under subsection (1A) of section 115BAC and the total income — (a) does not exceed seven hundred thousand rupees, the assessee shall be entitled to a deduction...' ITAT Ahmedabad said: 'This provision applies to any resident individual whose total income does not exceed Rs.7,00,000 and who is assessed under section 115BAC(1A). The statute does not draw any distinction between normal income and income chargeable at special rates, nor does it contain any express exclusion for tax arising under section 111A.' By contrast, the legislature has inserted an express bar on availability of section 87A rebate in section 112A(6), which states: (6) Where the total income of an assessee includes any long-term capital gains referred to in sub-section (1), the rebate under section 87A shall be allowed from the income-tax on the total income as reduced by tax payable on such capital gains. The absence of a corresponding clause in section 111A is legally significant and supports the principle that – when the legislature intended to deny rebate in respect of special income (as in section 112A), it has done so expressly. In contrast, the absence of any exclusion in section 111A or in section 87A must be construed in favour of the assessee. ITAT Ahmedabad explains the interplay between Section 115BAC (1A) with Chapter XII 'At this point we discuss the interplay of Section 115BAC(1A) with Chapter XII where the scope is Confined to Computation of Tax Rates. Section 115BAC(1A) opens with the phrase: 'Notwithstanding anything contained in this Act but subject to the provisions of this Chapter…' 'The purpose of this clause is to enable the computation of income tax under the concessional rate regime, subject to existing special rate provisions under Chapter XII, such as sections 111A, 112, 112A, etc.' 'This clause governs the computation of tax and does not ip so facto affect eligibility to rebates or deductions unless specifically restricted. Section 87A is not part of Chapter XII; it is an independent rebate provision under Chapter VIII of the Act. Therefore, the overriding clause in section 115BAC(1A) does not derogate or modify section 87A, unless section 87A itself provides for exclusion, which, in the present case, it does not. Thus, section 87A operates on the total tax computed, whether it includes tax at slab rates or special rates, and applies so long as the total income threshold is met.' ITAT Ahmedabad says: Explanatory Memorandum to Finance Bill, 2025 cannot override the plain language of the statute 'The CIT(A) placed strong reliance on the Explanatory Memorandum to the Finance Bill 2025, which clarified that rebate under section 87A is not available on tax arising from special rate incomes, including those under section 111A. However, we find this reliance to be misplaced for two reasons: Firstly, the Finance Bill 2025 itself proposes to insert new restrictions on rebate under section 87A w.e.f. A.Y. 2026–27, which implies that the existing law (i.e., as applicable to A.Y. 2024–25) does not contain such a restriction. Secondly, the Explanatory Memorandum cannot override the plain language of the statute. It is a tool of interpretation, not a source of substantive law.' What did ITAT Ahmedabad say about automatic denial of Section 87A tax rebate for STCG income? ITAT Ahmedabad affirms that divergent views on Section 87A law exists What is the significance of this judgement for taxpayers? Great news for tax payers! On August 12, 2025, the Income Tax Appellate Tribunal (ITAT) Ahmedabad bench allowed a taxpayer to claim Section 87A tax rebate on short term capital gains (STCG) under the new tax regime. This means that if your total income is up to Rs 7 lakh for the Assessment Year 2025-26, you won't have to pay any income tax on your STCG income, all thanks to Section 87A tax ITAT Ahmedabad clarified that Section 87A operates on the total tax computed, whether it includes tax at slab rates or special rates, and applies so long as the total income threshold is to remind you, the finance minister changed the law in Budget 2025 to prevent the Section 87A tax rebate on STCG income starting from AY 2026-27. But even before this amendment, the income tax department disabled Section 87A rebate claims from July 5, 2024 by modifyung the to the denial of Section 87A tax rebate, taxpayers earning less than Rs 7 lakh in the new tax regime were required to pay income tax on their STCG income. Additionally, those who were eligible for the Section 87A tax rebate on STCG income received a tax notice rejecting their article is about one such taxpayer, Miss Jayshreeben, who was issued a notice for attempting to claim the Section 87A tax rebate on her STCG income and how she won the case at ITAT challenged the tax department's notice with the Commissioner of Appeals, CIT (A), but unfotunately, she lost the case. The CIT (A) rejected her claim for the Section 87A tax rebate on STCG income, heavily referencing the Finance Bill, 2025 for Budget 2025 which explicitly stated that the Section 87A tax rebate is not applicable to Ahmedabad said that CIT (A) was wrong in relying on the Finance Bill 2025 to deny Section 87A tax rebate on STCG income. ITAT Ahmedabad said:Also read: No income tax rebate under Section 87A even if income is less than Rs 7 Lakh under new tax regime in this situation, point out CAs According to the ITAT Ahmedabad order dated August 12, 2025, here's the undisputed brief facts:'The undisputed facts of the case are that the assessee, a resident individual, filed a revised return of income (ITR) for A.Y. 2024–25 declaring total income of Rs 6,76,402, comprising short-term capital gain on listed equity shares taxable at 15% under section 111A, and opted for taxation under the new regime under section 115BAC(1A). The CPC, Bengaluru, processed the return under section 143(1) and denied rebate under section 87A of Rs 13,320, resulting in a demand of Rs 15,820.'Judicial member, Suchitra R. Kamble and Accountant Member Makarand V. Mahadeokar from ITAT Ahmedabad said: 'Accordingly, we hold that the assessee is eligible for rebate under section 87A for A.Y. 2024–25 even though the income includes STCG taxable under section 111A. The AO (tax department) is directed to allow rebate of Rs.13,320 and recompute tax liability accordingly. The demand of Rs.15,820 raised in CPC intimation stands deleted. Refund, if any, shall be granted in accordance with law. Order pronounced in the Court on 12th August, 2025 at Ahmedabad.'Chartered Accountant Prakash Hegde says: 'It is a welcome Order by the ITAT that is very logical and will benefit taxpayers who are pensioners or other senior citizens and those who are not too rich to cross a taxable income threshold of Rs 7 lakh per year. This ITAT order vindicated our view that until the Financial Year 2024-25, there was no restriction on the rebate under Section 87A. Ideally, the Government and the tax authorities should be generous enough to give relaxations in favour of the taxpayers and not pinch them for small rebate amounts. I wish they stop litigating this matter anymore, across India at least for FY 2024-25 cases. Moreover, they should not have introduced the restriction through amendment in the Finance Act, 2025.'According to the ITAT Ahmedabad order dated August 12, 2025, here's the core issue of contention:Judicial member, Suchitra R. Kamble and Accountant Member Makarand V. Mahadeokar from ITAT Ahmedabad said:Judicial member, Suchitra R. Kamble and Accountant Member Makarand V. Mahadeokar from ITAT Ahmedabad said:Judicial member, Suchitra R. Kamble and Accountant Member Makarand V. Mahadeokar from ITAT Ahmedabad said:ITAT said: 'Therefore, the prospective amendment in the Finance Act 2025 supports the view that under the unamended provision applicable for A.Y. 2024–25, rebate under section 87A cannot be denied merely because tax arises under section 111A.'ITAT Ahmedabad said: '...the Hon'ble High Court (Bombay High Court) clearly held that the CPC utility or system configuration cannot override statutory rights, and that each case must be adjudicated on its own merits. We at the Tribunal, being such a quasi-judicial authority, are therefore duty-bound to examine the claim in light of the statutory framework and not be influenced by automated denial or procedural logic adopted by the CPC.'Judicial member, Suchitra R. Kamble and Accountant Member Makarand V. Mahadeokar from ITAT Ahmedabad said:'The assessee has also relied on an appellate order dated 27.05.2025 passed by CIT(A)-1, Nagpur in the case of Avni Milanbhai Maniya, wherein on identical facts the CIT(A) allowed the claim of rebate under section 87A in respect of STCG taxable under section 111A. We also note that such a decision was taken by the JCIT/ relying on the decision of Beena Manishbhai Fofaria for the A.Y. 2024-25. While not binding, the said appellate order affirms that divergent views exist and such benefit has been allowed in similar factual circumstances.'ET Wealth Online has asked various experts about what might be the significance of this judgement for taxpayers, here's what they said:The Bombay High Court in the case of Chamber of Tax Consultants vs. Director General of Income Tax (systems) [2025] 473 ITR 85 (Bombay) had held that the assessee cannot be precluded to raise a possible claim due to Return filing utility. The High Court had however not expressed any view on the validity of the claim on section 87A being allowable against the incomes taxed at special rates. This was left to the authorities under the Act while processing the CPC had unfortunately continued to deny the claim, which was legally a justified claim. As a result, the assesses who were denied the claim had to resort to appeal proceedings to claim the relief. Now that the Income-Tax Appellate Tribunal (ITAT) has allowed the claim of the assessee on merits, it will be possible for many assessee to support their case in pending litigations, if any. The verdict will also help the assessee to raise similar claim for the assessment year 2025-26 for which the Returns are being filed now. However, due to the amendment made in the Act with effect from April 1, 2025, rebate under Section 87A will not be available with effect from AY 2026-27 against the incomes charged to tax at special rates."A rebate has always been a tool to reduce the tax liability of people in the lower income brackets, without passing on the benefit to those in the higher income brackets. Section 87A was also worded accordingly, making people with total income under Rs 7 lakh eligible for the rebate. Without an express exclusion of rebate in respect of tax liability on short term capital gains either in section 87A or in section 111A, it was inappropriate on part of the CPC to disallow the rebate claim on tax on short term capital affected several small taxpayers, for whom the tax amount was significant, but not significant enough to challenge the demand raised by CPC. Also, while there were several orders in favour of the taxpayer from CIT(A) on this issue, the same would not be binding and thus, were of little precedent value. The ITAT Ahmedabad ruling will now help the taxpayers as it can be relied upon in the the issue of how this will be practically given effect to, still remains. Rectification of orders under section 154 may not be an option as the order of the ITAT Ahmedabad is a subsequent decision. The taxpayers may apply for revision under section 264, which may not be entertained since the order is from a tribunal. Alternatively, they will have to individually appeal against the 143(1) intimation, which may result in higher costs as compared to the demand raised, making it decision is a positive step toward reinforcing tax certainty and upholding the rule of law, reflecting a fair interpretation aligned with legislative intent. However, the recurring litigation over the 87A rebate, particularly when the disputed amounts are relatively small (not exceeding Rs 25,000 per taxpayer), runs counter to the government's aim of minimizing low-impact tax disputes by withdrawing appeals that involve much larger curb such litigation and advance the broader objective of tax certainty and ease of doing business, the tax authorities could consider issuing a circular to clarify the position for prior years. This would help bring closure to ongoing disputes and allow a more meaningful utilisation of administrative this judgment, Ahmedabad ITAT indirectly highlighted very important point that language of memorandum (based on which amendment is proposed in rebate provisions for FY 25-26) is contrary. Memorandum mention that Provision of 87A is clear and it also proposes to insert new restrictions on rebate under section 87A w.e.f. A.Y. 2026–27, which implies that the existing law (i.e., as applicable to FY 2023-24 and FY 2024-25 ) does not contain such a Judgment provides relief to appellant (Jayshreeben Jayantibhai Palsana), it is not likely to benefit other taxpayers who prefer to save the cost of litigation for benefit already claimed in ITR of FY 2023-24 or other taxpayers who are planning to claim benefit in ITR of FY the time system of income tax department is not updated, benefit of rebate will be continued to be denied against STCG (covered by Sec 111A) earned in FY 2023-24 and FY 2024-25.
Mint
2 hours ago
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Generative AI set to improve banking operations in India by 46%: RBI Report
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