The Income Tax (IT) department will exempt the old tax demand of up to R1 lakh for any assessee under the Income Tax Act wealth Tax Act or Gift Tax Act, as per the notification.
In the interim budget speech, Finance Minister Nirmala Sitharaman announced the withdrawal of petty tax demands of R10,000 a year up to assessment year (AY) 2009-10 and each demand of R25,000 during AY 2011-12 and AY 2015-16.
The same order will be executed via the Directorate of Income Tax(Systems)/Centralised processing centre, preferably within two months.
The remission along with the extinguishment of these entries of the due direct tax demands will not get applied to the demands raised against the tax deductors or tax collectors under TDS or TCS provisions of the income tax act.
To calculate the aforementioned maximum ceiling of R100,000 for any typical taxpayer. “Consequent to the aforesaid remission and extinguishment of entries of outstanding demand, 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 the 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,” as per the notification.
If any tax obligation emerges against these taxpayers due to the application of section 24 of section 2 of the IT Act, then the same will be remitted and extinguished. Section 24 of the IT Act authorizes homeowners to claim a deduction on their home loan interest.
The notification stated that if a taxpayer’s outstanding dues are dismissed, they cannot use the same as a ground to claim a credit or refund under tax laws.
There is no impact on the current or the potential criminal cases against the assessees through any forgiveness of the dues.
Dues forgiveness won’t affect ongoing cases
As per the stated notification, any forgiveness of the dues shall not affect the current or the criminal cases against the assessees and does not furnish any special advantages automatically or provide any immunity in such legal proceedings beyond what is mentioned in the order of forgiveness.
