RBI Issues Circular On Levying Unfair Interest Charges On Customers

Income-tax payees have been left disappointed by the interim budget presented by finance minister Nirmala Sitharaman. The tax slabs have been retained at the old level. However, Finance Minister Nirmala Sitharaman has announced to get rid of the demand of outstanding tax stuck in litigation. This step is expected to provide relief to 1 crore taxpayers. This is being considered as the biggest highlight of this budget.

Sitharaman gave relief to those taxpayers who had tax arrears. The Finance Minister said that the demand from those who had outstanding tax of up to Rs 25,000 till the financial year 2009-10, will now be waived off. Similarly, relief from direct tax dues up to Rs 10,000 has also been given for the financial years 2010-11 to 2014-15. The Finance Minister claims that 1 crore taxpayers are going to benefit from this step.

Sitharaman said that there are a large number of minor, unverified or disputed tax demands. Many of these tax dues date back to before 1962. The result is that honest taxpayers are facing problems and their refunds are stuck.

Cost of tax recovery became the reason?

The reason behind this step of the government is believed to be the cost of tax recovery. The Income Tax Department spends a lot of money in the recovery of outstanding taxes. In such a situation, many times the government has to spend heavily even to recover small tax dues. Withdrawal of small amount tax demand by the Finance Minister will benefit both the taxpayer and the government. After this decision, all such cases pending in various appellate courts will be withdrawn.

During the budget speech, the Finance Minister also said about tax earnings that direct tax collection has more than doubled in the last 10 years. The average time taken for refunds was 93 days during 2013-14, which has now been reduced to 10 days. Monthly collection of GST has increased to Rs 1.66 lakh crore in 2023-24.