New Delhi: In a move welcomed by taxpayers, Finance Minister Nirmala Sitharaman announced the withdrawal of outstanding direct tax demands up to ₹25,000 for cases dating back to 1962-2009, benefiting an estimated 1 crore individuals.
Resolving Long-Standing Disputes: Presenting the interim budget for 2024-25 on Thursday, Ms. Sitharaman acknowledged the burden placed on taxpayers and the system by numerous "petty or disputed" tax demands. "To improve taxpayer services," she declared, "I propose to withdraw such outstanding direct tax demands upto ₹25,000 pertaining to years upto 2009-10 and Rs. 10,000 for the period from 2010 to 2015."
Benefits and Efficiency: This measure aims to ease anxiety for taxpayers and reduce administrative hassles for both the government and individuals. Additionally, Ms. Sitharaman highlighted the government's continued efforts towards streamlining tax processes, mentioning the introduction of Faceless Assessment and Appeal to enhance transparency and accountability. She also pointed to the simplified new form 26AS and reduced processing time for returns, now down to 10 days from 93 days in 2013-14.
Interim Measure and Future Roadmap: Ms. Sitharaman presented this interim budget as a "stop-gap" measure for the financial year's first quarter, with the full-fledged budget to be presented by the new government after the upcoming Lok Sabha elections. This upcoming budget is expected to unveil the roadmap for achieving a "Vikasit Bharat" (developed India).
Background: In September 2023, the Income Tax Department urged taxpayers to respond to notifications regarding outstanding demands for faster refund processing. This move, along with the withdrawal of older demands, demonstrates the government's commitment to streamlining tax processes and reducing inconvenience for citizens.
Overall, this announcement provides significant relief to a large number of taxpayers and signals the government's focus on improving efficiency and transparency in the tax administration system.
