Are you eligible for tax demand withdrawal: Finance Minister Nirmala Sitharaman has announced to withdraw the years-old disputed income tax demand of up to Rs 25 thousand in the budget presented on 1 February 2024. The probable amount of tax demand refund has to be determined on the basis of the year of demand. According to the announcement of the Finance Minister, the amount of income tax demand refund can be up to Rs 25,000 in disputed cases up to the financial year 2009-10 and a maximum of Rs 10,000 in the cases from the financial year 2010-11 to the financial year 2014-15. But questions are arising in the minds of many tax payers whether they will also get the benefit of this tax demand refund? To know the answer to this question, it is important to understand the conditions related to demand refund properly.
How many taxpayers will get the benefit?
While presenting the Central Government Budget (Budget 2024), the Finance Minister had said that about 1 crore taxpayers will get the benefit of Income Tax Demand Withdrawal. The day after the budget, Central Board of Direct Taxes (CBDT) Chairman Nitin Gupta told PTI that the old disputed demands of about 80 lakh taxpayers will be withdrawn. CBDT is the administrative authority of the Income Tax Department.
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How will taxpayers' eligibility for benefits be determined?
CBDT Chairman Nitin Gupta has clarified that the main basis for determining the eligibility of taxpayers to avail the benefit of tax refund will be the amount of pending demand. That is, if the amount of the disputed demand is up to Rs 25,000 in cases up to financial year 2009-10 and maximum Rs 10,000 in cases from financial year 2010-11 to financial year 2014-15, then such demand will be withdrawn. According to Nitin Gupta, the total amount of this demand refund is estimated to be around Rs 3500 crore.
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Will eligibility be decided by adding interest on tax demand?
While giving clarification on the announcement made in the budget, CBDT Chairman Nitin Gupta has clearly stated that while determining the eligibility of taxpayers for refund of tax demand, only the amount of the original demand will be taken into consideration. Interest added in subsequent years on pending demand will not be included in the disputed amount.
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What needs to be done to get the benefit of tax demand refund?
CBDT Chairman Nitin Gupta has said that following the announcement of the Finance Minister, the Income Tax Department will automatically withdraw the old disputed demands of about 80 lakh taxpayers. He has said that for this the eligible taxpayers will not have to take any step on their own. Gupta said in the interview given after the budget, “We will end such demands from our side. They will be removed from the records of the tax department. The taxpayer will not have to take any action from his side for this, nor will the Income Tax Department contact the taxpayers in this matter.”
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How to know whether you are eligible or not?
According to Nitin Gupta, necessary information about the pending demand under the demand refund scheme will be put on the e-filing portal of individual taxpayers, so that the taxpayers can see that information. If any problem is found in it, the taxpayer can contact the Income Tax Department about it and get it rectified. For example, if the rectification or appeal information in any demand is not updated or any refund case is pending, then it will be removed. Gupta has also told that soon an explainer will be issued by the department in this regard, in which detailed information about the entire process will be given.