After an updation of tax-filing utility on the income tax portal this month, taxpayers are being forced to give up a valid rebate of up to Rs 25,000 under the new tax regime if they have booked short-term capital gains, which overrides the Income Tax Act, 1961.

A rebate is a waiver given on income tax to help low-income earners reduce their taxes, which ensures that they file their tax returns. As per the Union Budget 2023 change, individuals opting for the new tax regime are permitted to claim a rebate of up to Rs 25,000 if their taxable income is below Rs 7 lakh.

The anomaly is caused by a different perception of what is “total taxable income” and needs to be corrected as it affects hundreds of low-income earners, say chartered accountants.