In a strategic move echoing the government’s commitment to simplifying citizens’ lives, Finance Minister Nirmala Sitharaman, during her Interim Budget 2024 speech, announced the withdrawal of outstanding direct tax demands. This noteworthy decision is expected to bring relief to approximately 10 million taxpayers, aligning with the government’s vision to reduce compliance burdens.
Unburdening Taxpayers:
Sitharaman proposed the withdrawal of outstanding direct tax demands up to ₹25,000 for the period up to the financial year 2009-10. Additionally, for financial years 2010-11 to 2014-15, outstanding demands up to ₹10,000 will be withdrawn. This move aims to provide substantial relief to a significant number of taxpayers and is in line with the government’s continuous efforts to improve ease of living.
Ease of Living and Doing Business:
The decision not only serves the purpose of offering mental relief to small taxpayers but also contributes to the larger goal of reducing the burden of the tax department. By withdrawing petty, non-verified, non-reconciled, or disputed direct tax demands, the government seeks to free up the department’s energy for more constructive endeavors. This dual-purpose initiative is poised to streamline tax administration and foster an environment conducive to better revenue generation.
Addressing Long-standing Litigations:
Sitharaman emphasized the need to address the long-standing issue of unresolved direct tax demands, some dating back to 1962. By withdrawing such demands, the Finance Minister aims to alleviate the anxiety faced by honest taxpayers while also facilitating smoother processing of refunds for subsequent years. This strategic step is poised to significantly reduce the number of old litigations plaguing the tax department.
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