CBDT Order: Waiver of Outstanding Tax Demands as of January 31, 2024, Capped at Rs. 1 Lakh per Assessee

Order: F.no. 375/02/2023, dated 13-02-2024

Following the Union Budget 2024 announcement by Finance Minister Nirmala Sitharaman, the Central Board of Direct Taxes (CBDT) has issued an order (F.no. 375/02/2023, dated 13-02-2024) to waive and extinguish tax demands under the Income Tax Act, 1961, Wealth Tax Act, 1957, or Gift Tax Act, 1958 [“Acts”].

The order details the process of extinguishing demands for various assessment years, specifying the monetary limit for outstanding tax demands and the maximum ceiling eligible for waiver for each assessee. The key highlights of the order are as follows:

a) Monetary Limit for Waiver of Demand:

  • Up to Assessment Year 2010-11, demands up to Rs. 25,000 per entry are eligible for waiver.
  • From Assessment Year 2011-12 to AY 2015-16, the waiver applies to demands up to Rs. 10,000 per entry.

b) Maximum Ceiling of Rs. 1 Lakh:

  • Remission and extinguishment of eligible demands are capped at Rs. 1,00,000 per assessee, irrespective of the total eligible amount across assessment years.

c) No Waiver for TDS/TCS Demands:

  • The CBDT specifies that the waiver of demand does not apply to demands raised against tax deductors or collectors under the TDS or TCS provisions of the Income Tax Act, 1961.

d) Tax Demand Components:

  • Tax demand includes the principal tax amount under the Act, along with any interest, penalty, fees, cess, or surcharge as per Act provisions, subject to the specified ceiling limit.

e) Exclusion of Interest on Delayed Payment:

  • Interest under section 220(2) is not considered when calculating the demand entry amount or the ceiling limit of Rs. 25,000, Rs. 10,000, or Rs. 1,00,000, respectively.

f) No Right to Claim Credit or Refund:

  • Remission of outstanding demands does not entitle the assessee to claim credit or refund under the Income Tax Act or any other legislation.

g) No Impact on Criminal Proceedings:

  • The waiver of demand does not affect ongoing or completed criminal proceedings against the assessee and does not provide any benefit, concession, or immunity under such proceedings.