The government has extended an olive branch to taxpayers who are still dealing with petty tax demands related to previous years. It has proposed to withdraw all direct tax demands up to Rs.25,000 pertaining to any year until 2009-10 and up to Rs. 10,000 for the years 2010-11 to 2014-15. This is expected to benefit up to a crore taxpayers who are still disputing such older tax demands. This comes at a time when taxpayers have been receiving notices from the Income Tax department for old tax demands, some dating back longer than 15 years.
Finance Minister Nirmala Sitharaman declared in her Budget speech, “There are a large number of petty, non-verified, non-reconciled or disputed direct tax demands, many of them dating as far back as the year 1962, which continue to remain on the books, causing anxiety to honest tax payers and hindering refunds of subsequent years.”
Tax consultants feel this relief was much needed and continues the government’s stance of improving taxpayer experience. Sudhir Kaushik, Founder, Taxspanner, said, “It is not a small relief when you see the number of taxpayers. Older demands are painful because it is difficult to keep documents for so long and defend. Taxpayers were in pain due to old demands, especially those that have refunds.”