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Income Tax Exemption Limit: The Central Board of Direct Taxes (CBDT) has given a big relief to the taxpayers, under which it has issued an order to give exemption on tax demand. According to CBDT, a rebate of up to Rs 1 lakh will be given on waiving off the outstanding tax demands related to income tax, property tax or gift tax till January 31, 2024. This relief to taxpayers was announced by Finance Minister Nirmala Sitharaman while presenting the interim budget 2024-25. Let us understand how taxpayers will be able to get tax exemption up to Rs 1 lakh?
Taxpayers will get rebate up to Rs 1 lakh
This decision of CBDT will benefit more than 1 crore taxpayers to whom the Income Tax Department has sent tax demand notices up to Rs 1 lakh. As per the announcement made in the interim budget, the Central Commission for Direct Taxes (CBDT) has started demanding exemption or waiver of old outstanding tax claim till January 31, 2024. As per the order issued in this regard, relaxation will be given. Given on tax demand up to Rs 25,000 per taxpayer in each assessment year till assessment year 2010-11.
These things are included in tax demand exemption
Apart from this, a rebate of Rs 10,000 will be given on tax demand every year from assessment year 2011-12 to 2015-16. Regarding tax demand exemption, CBDT has clearly stated in its order that such taxpayers will be given exemption of up to Rs 1 lakh on their total outstanding tax demand. It is important to note here that this limit of Rs 1 lakh includes the principal amount of tax demand, interest, penalty or fee, cess, surcharge. At the same time, this exemption will not be applicable to demands made against tax collectors deducting tax under TDS or TCS provisions.
It was announced in the interim budget
Even though there was no change in the tax slab in the interim budget presented in Parliament on February 1, Finance Minister Nirmala Sitharaman had announced exemption in the outstanding tax demand. The Finance Minister had said that this step is being taken to make business and life easier. He said that some of the outstanding tax demands dating back to 1962 are still on record, due to which taxpayers are worried and are also facing difficulty in getting refunds. He said that about 1 crore taxpayers will benefit from this exemption.
What is tax demand notice?
Here it is very important to understand what this tax demand notice is and why it is given to the taxpayers. So let us tell you that whatever tax declaration is made in ITR is scrutinized by the Income Tax Department. If there is any discrepancy then a tax demand notice is sent to the person filing the return. That is, if there is any discrepancy in the tax declaration, then you are issued a demand notice for outstanding tax. This notice is sent to you when you have a tax balance to pay and the refund has to be adjusted against it.