Learn about the announcement by the Central Board of Direct Taxes (CBDT) where taxpayers with pending tax demands up to Rs.1 Lakh can benefit from remission and extinguishment of their tax liabilities
In a recent move aimed at providing relief to taxpayers burdened with pending tax demands, the CBDT has issued an order in F. No 375/02/2023-IT-Budget dated February 13, 2024, initiating the remission and extinguishment of eligible old tax demands. This measure applies to tax demands outstanding as of January 31, 2024.
According to the CBDT order, taxpayers can avail of this relief subject to a maximum ceiling of Rs 1,00,000 (Rupees one lakh) per individual. The remission and extinguishment apply to the principal component of tax demand under the Income-tax Act, 1961, or corresponding provisions of other tax legislations, along with associated interest, penalty, fee, cess, or surcharge.
As per the CBDT order, taxpayers are relieved from the calculation of interest on delayed payments, as specified under section 220(2) of the Income-tax Act, 1961, or corresponding provisions of other tax laws. Consequently, these interest amounts are not considered when determining the Rs 1,00,000 ceiling limit.
For taxpayers with old demands, different thresholds apply based on the cut-off dates. Outstanding petty income tax demands up to Rs 25,000 from the inception of the statute till FY 2009-10, and up to Rs 10,000 from FY 2010-11 to FY 2014-15, have been extinguished. Taxpayers can view the status of their demands on the income tax portal under the ‘Response to outstanding demand’ tab.
Table showing the specified monetary limit of outstanding tax demand:
| Assessment years to which the entries of outstanding tax demands as on January 31, 2024 pertains | Monetary limit of entries of outstanding tax demands which are to be remitted or extinguished |
| Up-to AY 2010-11 | Each tax demand entry up-to Rs.25000 |
| AY 2011-12 to 2015-16 | Each tax demand entry up-to Rs.10000 |
The maximum ceiling limit of Rs 1,00,000 is calculated by considering each demand entry falling within the specified monetary limit, starting from the earliest assessment year to subsequent assessment years. Tax demand entries exceeding the specified monetary limit are excluded from this calculation. Additionally, fractions of demand entries are not considered for remission and extinguishment when computing the ceiling limit.
This initiative by the government aims to alleviate the tax burden on individuals with pending demands and facilitate compliance with tax obligations. Taxpayers are encouraged to check their eligibility and take advantage of this opportunity through the income tax portal.
To Download the CBDT Order CLICK HERE
To Know the Cash Transaction Limits under Income Tax CLICK HERE
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