The Finance Minister announced the withdrawal of all disputed direct tax demands up to Rs 25,000 until FY 2014-15 to improve taxpayer services and ease their burden. This move is expected to benefit around 1 crore taxpayers. The proposal aims to alleviate concerns regarding the significant backlog of tax dispute resolution and foster a more conducive environment for compliance and economic growth. Additionally, the budget highlights achievements in processing tax returns, with the average processing time reduced from 93 days in 2013-14 to just 10 days, ensuring faster refunds and an enhanced taxpayer experience.
It is important to note that an individual can receive outstanding tax demand notices under various sections of the Income-tax Act, 1961. Salaried individuals typically receive six types of tax notices, including sections 143(1), 139(9), 142, 143(2), 148, and 245. Section 143(1) notice is issued when tax demand is payable after the income tax return is processed by the CPC. Section 139(9) notice is sent when an individual files a defective income tax return, which may involve using the wrong ITR form or other filing errors.