The Income Tax Department has set a limit of Rs 1 lakh per taxpayer as announced in the budget for withdrawal of small tax demands.
Finance Minister Nirmala Sitharaman in her interim budget speech for 2024-25 announced withdrawal of outstanding direct tax demand up to Rs 25,000 up to assessment year 2010-11 and Rs 10,000 from assessment year 2011-12 to 2015-16. The total tax demand involved in this is around Rs 3,500 crore.
The Central Board of Direct Taxes (CBDT) issued this order to implement the announcement made in the interim budget for 2024-25. CBDT has said in the order that till January 31, 2024, a maximum limit of Rs 1 lakh per taxpayer has been fixed for waiving off such outstanding tax demands related to income tax, property tax and gift tax.
The limit of Rs 1 lakh includes the principal amount of tax demand, interest, penalty or fee, cess, surcharge. However, this exemption will not be applicable to demands made against tax collectors deducting tax under the TDS (tax deducted at source) or TCS (tax collected at source) provisions of the Income Tax Act.
No entitlement to any claim of ‘credit’ or ‘refund’: Manish Bawa, partner, Nangia Anderson India, said the instructions make it clear that this exemption does not entitle taxpayers to any claim of ‘credit’ or ‘refund’ Is. Additionally, the exemption will not affect ongoing, planned or potential criminal legal proceedings against the taxpayer and does not provide any immunity under any law.
Sitharaman had said in the budget speech, “A large number of small direct tax demands are pending in the books of accounts. Many of those demands are older than 1962. This causes trouble to honest taxpayers and creates problems regarding refunds.
