Income Tax Department to Wipe Out Petty Tax Demands for approx 80L Taxpayers on its own; says CBDT Chairman

The Central Board of Direct Taxes ( CBDT ) Chairman, Nitin Gupta, announced that the income tax department will autonomously clear pending petty tax demands for approximately 80 lakh taxpayers. This initiative follows the government’s proposal, as outlined in the interim Budget, to withdraw direct tax demands up to Rs 25,000 for the fiscal year 2009-10 and up to Rs 10,000 for the financial years 2010-11 to 2014-15.

Finance Minister Nirmala Sitharaman emphasised the government’s commitment to improving the ease of living and doing business for citizens. She noted that numerous non-verified, non-reconciled, or disputed direct tax demands, some dating back to 1962, were causing concern for honest taxpayers and hindering refunds. Also read: CBDT Notifies ITR-2, ITR-3 and ITR 5 Forms for A.Y. 2024-25; Expands ITR Filing under EVC to Tax Audit Cases of Individual/ HUF CBDT Chairman Gupta assured that the income tax department would erase these demands, relieving taxpayers of any action.

The process is designed to be non-adverse to the assessee, and taxpayers won’t be contacted regarding this matter. However, details of the demands will be available on the individual taxpayers’ e-filing portal for review.

If any issues arise, the department will address them promptly. Gupta highlighted that the CBDT would issue a “speaking order” to explain the process comprehensively. If taxpayers encounter problems related to demand cases, the department will address rectifications, pending appeals, or refund issues. Approximately 80 lakh taxpayers are expected to benefit from this measure, involving an amount of about Rs 3,500 crore. Gupta emphasised that only the base figure of the demand, irrespective of the interest accumulated over the years, would be considered in determining eligibility for this initiative. Also read: ITR Update: CBDT notifies Changes in Form ITR 6 in Accordance with Amendment in Finance Act, 2023 w.e.f. April 1st 2024

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