BUSINESS

Income Tax Department would forgive previous tax obligations for people up to R1 lakh

NEW DELHI: According to a statement, the Income Tax (IT) department would forgive any previous tax demand up to R1 lakh for any taxpayer covered by the Income Tax Act, Wealth Tax Act, or Gift Tax Act.

The elimination of petty tax requests of R10,000 annually up till assessment year (AY) 2009–10 and each demand of R25,000 during AY 2011–12 and AY 2015–16 was announced by Finance Minister Nirmala Sitharaman in her interim budget statement.

The Centralized Processing Center/Directorate of Income Tax (Systems) must execute this directive, ideally in a fortnight.

It should be noted that claims made against tax deductors or collectors under the TDS or TCS provisions of the income tax legislation will not be subject to the remission and extinguishment of such entries of outstanding direct tax demands.

Additionally, to determine the aforementioned R100,000 maximum limit for every particular taxpayer or assesses. The notification stated: “There shall not be a requirement of calculation of interest on account of delay in payment of demand under sub-section (2) of section 220 of the income tax act, 1961 or corresponding provisions of wealth tax act, 1957 and gift tax act, 1958 and therefore, the same shall not be considered for the purpose of determining the ceiling of R100,000.” This was the result of the previously mentioned remission and extinguishment of entries of outstanding demand.

Furthermore, in the event that a taxpayer is subject to any tax obligation resulting from the application of Section 24 of Section 2 of the IT Act, the liability will be remitted and eliminated. Homeowners may deduct their house loan interest under Section 24 of the IT Act. The warning made it clear that a taxpayer cannot rely on the forgiveness of their overdue taxes to file a tax return or request a credit.

Furthermore, any reduction in debt won’t affect current or future criminal prosecutions involving the taxpayer.

Dues forgiveness won’t affect cases that are still pending

According to the announcement, any forgiveness of dues will not affect current or prospective criminal prosecutions brought against the taxpayer and will not provide them automatic immunity or favorable treatment in those cases outside of what is specified in the order of forgiveness.

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