Tax waiver of Rs 1 lakh for 1.11 crore taxpayers

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New Delhi, Feb 19: The government has decided to waive off tax liabilities up to Rs 1 lakh for 1.11 crore taxpayers.

These tax liabilities were of those assessees who had some type of unpaid taxes remaining outstanding against their name between the period from Assessment Year 2010-11 to Assessment Year 2015-16 due to some dispute.

Earlier in interim Budget 2024, Finance Minister Nirmala Sitharaman had proposed  to forgive tax liabilities of assesses to the tune of up to Rs 25,000 for AY 2010-11 and Rs 10,000 each of  AY  2011-12 to AY 2015-16.  But on Monday, February 19, 2024, the Central Board of Direct Taxes (CBDT) announced increase in the limit of tax liability to be waived off to Rs 1 lakh. The CBDT has said that the leeway of Rs 1 lakh would include total tax liability of the taxpayer including whatever interest, penalty, fees, cess, surcharge outstanding against his name. Moreoever, the cap of Rs 1 lakh also subsumes wealth tax, gift tax and income tax. It is not only pertaining to income tax.

Revenue Secretary Sanjay Malhotra had earlier this month said that there are about 1.11 crore such tax payers who stand to benefit from the Government’s decision. The CBDT also added that the ex-chequer will have to bear total expenses of Rs 3,500 crore due to this decision.

Nangia Andersen India Partner Maneesh Bawa said,  “Taxpayers are advised to access their online accounts and navigate to Pending Action > Response to Outstanding Demand to verify the status of ‘Extinguished Demands’ related to them.”

Bawa also said the CBDT’s directive further specifies that the tax payer cannot use the limit of Rs 1 lakh to avail of any claims for credit or refunds for period specified above.

Additionally, the waiver or cancellation will not influence any ongoing, planned, or potential criminal legal proceedings against the taxpayer and does not grant any immunity under any legislation.

Moreover, the CBDT’s notification also does not apply on any type of pending due on TDS or TCS agaisnt these tax payers.