Income Tax: CBDT sets outstanding tax waiver limit at Rs 1 lakh. How to check status?

The Central Board of Direct Taxes (CBDT) earlier this week had set the outstanding tax waiver limit at Rs 1 lakh, which is in line with the announcements made by Union Finance Minister Nirmala Sitharaman in the interim budget for FY2024-25. The order specified that the outstanding demands for remission should pertain to income, wealth, and gift tax. The upper ceiling of Rs 1 lakh for remission includes tax demand, interest, penalty if any, and cess and surcharge.

The CBDT order said: "Consequent to the aforesaid remission and extinguishment of entries of outstanding demand, there shall not be requirement of calculation of interest on account of delay in payment of demand under sub-section (2) of section 220 of the Income-tax Act, 1961 or corresponding provisions of Wealth-tax Act, 1957 and Gift-tax Act, 1958 and therefore, the same shall not be considered for the purpose of determining the ceiling of Rs 1,00,000 (Rupees one lakh)."

FM Sitharaman during her Interim Budget speech this year proposed relief for taxpayers stuck in tax disputes, some dating back to 50 years. The relief covers outstanding tax demands under the Income-Tax Act, 1961, Wealth-tax Act, 1957, and Gift-tax Act, 1958, as of January 31, 2024.

The minister offered to withdraw tax demands up to Rs 25,000 for cases until FY2009-10 and Rs 10,000 for cases between FY2010-11 and FY2014-15.  The minister said around Rs 3,500 crore in outstanding tax demands will be withdrawn to help resolve the backlog spending with the department and remove the burden of honest taxpayers.

There are currently around 1.11 crore disputed tax demands. The CBDT notification stated no audit requirement will be necessary for the “remission of entries of outstanding tax demand” under the General Financial Rules, 2017. The order is expected to be implemented within two months.

Who are eligible?

Nangia Andersen India Partner Maneesh Bawa said the directive further specifies that this waiver or cancellation does not entitle taxpayers to any claims for credit or refunds.

Additionally, the waiver or cancellation will not influence any ongoing, planned, or potential criminal legal proceedings against the taxpayer and does not grant any immunity under any legislation.

"Taxpayers are advised to access their online accounts and navigate to Pending Action > Response to Outstanding Demand to verify the status of 'Extinguished Demands' related to them," Bawa said.

How to check your status?

Taxpayers or any of your family members have received a tax demand pertaining to any financial year up to FY 2014-15, and if not in the excluded category, would be the beneficiary of this tax waiver.

A taxpayer can check pending tax status on the official income tax portal by following these steps:

1. Visit the income tax portal https://www.incometax.gov.in/iec/foportal/

2. Login and navigate to the ‘Pending Action’ tab at the top of the page.

3. Click on the ‘Response to Outstanding Demand’ option.

4. It will show the data. In case of no outstanding demand, it will show the message ‘No records of outstanding demand found’.

In case of any doubt, one call the toll-free numbers 18003090130 or 180020335435.

Also read: How to pick the right tax-saving investments before March 31 deadline? A 7-point guide