All outstanding personal tax demand notices up to Rs 25,000 withdrawn till FY 2014-15 in Budget 2024
February, 20th 2024
The Finance Minister has announced withdrawal of all outstanding disputed direct tax demand up to Rs 25,000 in the interim budget 2024. The announcement has been made to provide the ease of living of the taxpayers. This move will benefit 1 crore tax payers as per the interim budget 2024 speech.
As per the interim Budget 2024 speech, "Moreover, in line with our Government’s vision to improve ease of living and ease of doing business, I wish to make an announcement to improve taxpayer services. There are a large number of petty, non-verified, non-reconciled or disputed direct tax demands, many of them dating as far back as the year 1962, which continue to remain on the books, causing anxiety to honest tax payers and hindering refunds of subsequent years. I propose to withdraw such outstanding direct tax demands up to Rs 25,000 pertaining to the period up to FY 2009-10 and up to Rs 10,000 for financial years 2010-11 to 2014-15. This is expected to benefit about a crore tax-payers."
"The proposal is a commendable effort to enhance taxpayer services in Interim Budget 2024. This move should reduce burden on taxpayers, fostering a more conducive environment for compliance and economic growth," says Sandeep Jhunjhunwala, Partner, Nangia Andersen LLP.
Lokesh Shah, Partner, IndusLaw says, "On dispute resolution, the Interim Budget proposes to withdraw the outstanding direct tax demands up to Rs 25,000 for period up to FY 2010 and up to Rs 10,000 for FY 2010-11 to FY 2014-15. Finance Minister indicated that this is likely to benefit about 10 million taxpayers. This is a small relief against higher expectations to alleviate concerns on significant backlog of tax dispute resolution."
"The government has made an attempt to provide some relief to over 1 crore tax payers by withdrawing a chunk of outstanding direct tax demands that hindered refunds and caused troubles," says CA Rahul Kapoor, RKA Corporate Advisory.
According to tax experts, the Central Board of Direct Taxes (CBDT) will need to come out mechanism how waiver of tax demands will work.
It is important to note that an individual can get outstanding tax demand notices under various sections of the Income-tax Act, 1961. Usually, a salaried individual gets six types of tax notices. A salaried can get tax notice under sections - 143(1), 139(9), 142, 143(2), 148 and 245 - of the Income-tax Act, 1961.
Section 143(1) tax notice is sent when tax demand is payable once the income tax return is processed by the CPC, income tax department. Section 139(9) tax notice is sent when an individual files a defective income tax return. This includes filing ITR using wrong ITR form or any other error made while filing tax return.
Similarly, to adjust the past outstanding dues with the current year's income tax refund, a notice under Section 245 is issued to the taxpayer.
"Additionally, the budget highlights achievements in processing tax returns, with the average time reduced from 93 days in 2013-14 to just 10 days, ensuring faster refunds and an enhanced taxpayer experience," Pramod Kathuria, Founder and CEO of Easiloan.