Law Legends


CBDT waived Outstanding Tax Demand

CBDT recently issued an order F. No. 375/02/2023- IT-Budget dated 13th February 2024, regarding the waiver/ extinguishment of old tax demands which were outstanding as on 31st January 2024. This order not only remits/ extinguishes tax demands of income tax but also the demand of wealth tax and Gift tax. The Order specified the Conditions for withdrawing the demands.

Monetary limits and assessment years covered

This order specified the monetary limit for remitting or extinguishment of the demand. The maximum limit for extinguishment is ₹ 1,00,000 for specified assessee.

Assessment Year/s (A.Y.) to which the entries of outstanding tax demands as on January 31, 2024 pertain Monetary limit of entries of outstanding tax demands which are to be remitted and extinguished (in Rupees)
Upto A.Y. 2010-11 Each demand entry upto ₹. 25,000/-
A.Y. 2011-12 to A.Y. 2015-16 Each demand entry upto ₹. 10,000/-

Demand entries which are consider for waiver

  1. Principal component of tax demand under the Income-tax Act, 1961 or corresponding provisions of Wealth-tax Act, 1957 or Gift-tax Act, 1958 and
  2. Interest, penalty, fee, cess, or surcharge under various provisions of the Income-tax Act, 1961, or corresponding provisions, if any, of the Wealth-tax Act, 1957, or Gift-tax Act, 1958.

How will the maximum ceiling limit of tax demand be calculated?

The remission and extinguishment of entries of outstanding tax demand will be carried out in respect of each demand entry falling within the specified monetary limit, starting from the earliest assessment year to subsequent assessment year(s) subject to the condition that the aggregate value of such demand entries shall not exceed ₹ 1 lakh for any specific taxpayer.

To compute the maximum ceiling of ₹ 1 lakh any tax demand entry having value more than the specified monetary limit.

For example

Mr Arun has four outstanding demand for

AY 2003-04 – ₹ 25,000,

AY 2005-06 - ₹ 20000,

AY 2006-07 - ₹ 23000

AY 2007-08- ₹ 12,000 , and

AY 2008-09- ₹ 18,000 .

Further there is another demand of ₹ 30,000 for AY 2004-05. Hence in aggregate his outstanding tax demand is ₹ 1,28,000. However, as for AY 2004-05, outstanding demand (₹ 30,000) is more than specified limit hence the said demand will not be extinguished and same will not be considered for calculation of overall limit of ₹ 1,00,000.

Autonomous Applied

This waiver will be applied automatically without any intervention required by the taxpayer. Assessee can check the status of their waived demands by logging into the income tax portal and accessing the "Pending Action > Response to Outstanding Demand" section.

Waiver is not applicable to

This relief does not extend to demands against tax deductors or tax collectors under TDS or TCS provisions of the Income-tax Act, 1961.

Elimination of interest calculation

It is clarified that there shall not be requirement of calculation of interest on account of delay in payment of demand under section 220(2)

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