You may get waiver above Rs 1 lakh on your income tax demand notice in these cases
income tax demand.
CBDT said in the order, «Consequent to the aforesaid remission and extinguishment of entries of outstanding demand, there shall not be requirement of calculation of interest on account of delay in payment of demand under sub-section (2) of section 220 of the Income-tax Act, 1961 or corresponding provisions of Wealth-tax Act, 1957 and Gift-tax Act, 1958 and therefore, the same shall not be considered for the purpose of determining the ceiling of Rs 1,00,000 (Rupees one lakh).»
Also read: Tax demand up to Rs 1 lakh/person waived: Check ITR a/c.
How the total income tax demand waiver can be more than Rs 1 lakh
As per income tax provisions, if demand is not paid within 30 days of raising demand, interest at 1% per month is charged for the period of delay under section 220. If this amount is included to determine the overall amount of tax demand, then many taxpayers may not be eligible for the waiver. However, some tax experts say that the calculation of interest is still an area where further clarification from CBDT is required.
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Also read: How selling equities before March 31 can help you save income tax.
«CBDT has clarified that no interest shall be calculated for non-payment of tax demand. However, if a tax demand was already raised including accrued interest amount, then it is unlikely that it would be waived off if it is crossing the umbrella limit of Rs 1 lakh,» says Mihir Tanna, associate director-direct tax, S.K Patodia LLP, a CA
