CBDT issues order giving effect to the Budget proposal of remitting petty tax demands

[Vivek Jalan]

In the Interim Budget 2024-25, The finance minister proposed to withdraw direct tax demands up to INR 25000 pertaining to the period up to tax year 2009-10 and up to INR 10000 for tax years 2010-11 to 2014-15. Vide Order F. No. 375/02/2023-IT-Budget dated 13th February 2024 the CBDT has implemented the proposal on remission or extinguishment of small tax demands outstanding as on 31 January 2024 under the Income Tax Act 1961 (ITA) or Wealth Tax Act, 1957 or Gift Tax Act 1958. However, as always, the actual scheme has certain surprises, additions, deletions, and modifications. The salient features of the scheme are as follows –

1. The outstanding as on January 31, 2024, will be considered as follows: -

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)
(1)	(2)
Up to A.Y. 2010-11	each demand entry up to Rs. 25,000/-
A.Y. 2011-12 to A.Y. 2015-16	each demand entry up to Rs. 10,000/-

B. Now the surprise elements - The remission and extinguishment of above outstanding tax demand shall be subject to the maximum ceiling of Rs. 1,00,000/- for any specific taxpayer/ assesses for the demand entries consisting of tax demands under Income-tax Act, 1961 or corresponding provisions of Wealth-tax Act, 1957 or Gift-tax Act, 1958; stand-alone Interest, penalty, fee, cess or surcharge thereon under various provisions of the Income-tax Act, 1961 or corresponding provisions, if any, of Wealth-tax Act, 1957 or Gift-tax Act, 1958.

However, where tax demands meet remission and extinguishment, interest need not be considered for the calculation of the ceiling limit.

C. No TDS or TCS demands under Income Tax shall be considered in this scheme.

D. The scheme shall be implemented by Centralized Processing Centre (CPC) preferably within two months.

E. Remission/extinguishment of demand will be undertaken in a chronological manner for the tax years and fraction of demand shall be ignored.

F. Withdrawal/remission of tax demands under this Order will not give any right to the taxpayers to claim credit or refund of waived amount and will not grant immunity from any ongoing litigation.