In a significant move aimed at providing relief to taxpayers and streamlining the resolution of long-pending tax disputes, Finance Minister Nirmala Sitharaman has announced the withdrawal of all outstanding disputed direct tax demands up to Rs 25,000 up to a certain period. This announcement is aligned with the government’s vision to enhance the ease of living and ease of doing business for citizens.
“I propose to withdraw such outstanding direct tax demands up to Rs 25,000 pertaining to the period up to financial year 2009-10 and up to Rs 10,000 for financial years 2010-11 to 2014-15. This is expected to benefit about a crore tax-payers,” Sitharaman said.
The decision targets a considerable number of petty, non-verified, non-reconciled, or disputed direct tax demands, some dating back to 1962. These outstanding demands, which have been causing anxiety among honest taxpayers and impeding the processing of refunds for subsequent years, will be withdrawn. The proposal specifically covers direct tax demands up to Rs 25,000 for the period up to the financial year 2009-10 and up to Rs 10,000 for financial years 2010-11 to 2014-15.
The gainers
This move is expected to benefit approximately one crore taxpayers, providing them with much-needed relief. The withdrawal of disputed income tax demands for the mentioned periods is seen as a commendable effort to improve taxpayer services, reduce the burden on taxpayers, and create a more conducive environment for compliance and economic growth.
Tax experts have lauded the decision, acknowledging it as a positive step towards resolving long-standing tax disputes. The withdrawal of outstanding direct tax demands is seen as a small but significant relief, particularly for those facing issues related to tax dispute resolution. The Finance Minister’s indication that this move will benefit around 10 million taxpayers is expected to ease concerns related to the substantial backlog of tax dispute resolutions.
Individuals often receive outstanding tax demand notices under various sections of the Income-tax Act, 1961. These include sections like 143(1), 139(9), 142, 143(2), 148, and 245. The withdrawal of such demands is seen as a positive step in improving the overall tax administration system and fostering a more taxpayer-friendly environment.
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