Relief to Tax payers regarding long outstanding Income Tax demands
In the Interim Budget for 2024, announced on February 1, 2024, the Honourable Finance Minister made a significant decision regarding the resolution of outstanding Income Tax demands for Taxpayers/assessees. Following this announcement, the Central Board of Direct Taxes (CBDT) issued an official order on February 13, 2024, addressing the specific details of this resolution.
This directive states that outstanding Income Tax demands up to the Assessment Year (AY) 2015-16, as of January 31, 2024, dating back to 1961, will be considered for extinguishment under certain conditions. The order provides a clear framework for the waiver of outstanding tax demand entries, categorized by assessment years and specified limits for each demand entry as follows:
|
Assessment year
|
Amount of each Outstanding demands entries to waived off. (limits) |
|
Upto A.Y. 2010-11 |
Rs. 25,000 (each demand entry) |
|
A.Y. 2011-12 to A.Y. 2015-16 |
Rs. 10,000 (each demand entry) |
It is important to note that the total amount of waived demands for any specific taxpayer cannot exceed Rs. 1,00,000. The types of demand entries that can be waived include the principal component of the tax demand, as well as any interest, penalties, fees, cess, or surcharges associated with it.
However, there are specific exclusions and considerations to keep in mind:
1. This relief on outstanding direct tax demands does not apply to demands raised against tax deductors or collectors under the provisions of Tax Deducted at Source (TDS) or Tax Collected at Source (TCS) in the Income-tax Act of 1961.
2. When calculating the maximum relief ceiling of Rs. 1,00,000, any demand entry exceeding the individual limits of Rs. 25,000 (for AY up to 2010-11) or Rs. 10,000 (for AY 2011-12 to 2015-16) will not be considered.
3. There is no requirement for an audit of these demand entries to qualify for this relief.
This order is a part of the government's efforts to alleviate the tax burden on Taxpayers/Assessees for older Assessment Years and streamline the resolution of outstanding tax demands.
Disclaimer: This material and the information contained herein is intended for clients and other Chartered Accountants to provide updates and is not an exhaustive treatment of such subject. We are not, by means of this material, rendering any professional advice or services. It should not be relied upon as the sole basis for any decision which may affect you or your business
