Government grants relief to over 1 crore taxpayers: Waives tax arrears up to Rs 1 Lakh

In a significant move, the Narendra Modi government has provided substantial relief to over one crore taxpayers by waiving off tax arrears of up to one lakh rupees. The Central Board of Direct Taxes (CBDT) issued an order on February 13, 2024, wherein the Income Tax Department has forgiven the outstanding tax claims until January 31, 2024. 

According to the CBDT order, taxpayers with tax arrears up to Rs 1 lakh will benefit from this waiver. Specifically, for the assessment year 2020-11, tax demands up to Rs 25,000 will be abolished for each taxpayer until January 31, 2024. For assessment years 2011-12 to 2015-16, an exemption on tax demand of Rs 10,000 per annum will be implemented, with an overall cap of one lakh rupees. 

Former ICAI chairman Ved Jain commended the government’s effort to eliminate old tax demands, characterizing them as write-offs. The Central Processing Centre in Bangalore is tasked with implementing this order within two months. 

Finance Minister Nirmala Sitharaman had previously announced this relief during the interim budget presentation on February 1, 2024, stating that one crore taxpayers would benefit from the withdrawal of direct tax demands up to Rs 25,000. 

The move aims to provide relief to a significant portion of taxpayers burdened by longstanding and often disputed tax demands, offering a fresh start and eliminating the need to calculate interest on extinguished demands, further easing the financial burden on the beneficiaries.