There is good news for taxpayers with outstanding direct tax demands up to a specified limit. The Central Board of Direct Taxes (CBDT) has initiated the remittance and extinguishment of eligible old tax demands outstanding as of January 31, 2024. The ceiling limit of tax demand for individuals is set at Rs 1,00,000 for specific taxpayers/assessees, covering the principal tax demand, interest, penalty, fee, cess, or surcharge. Remission and extinguishment of entries of outstanding demand will not require the calculation of interest, providing significant relief to taxpayers. Additionally, different thresholds for remission and extinguishment apply to various cut-off dates in the past. For example, old petty income tax demands up to Rs 25,000 from the inception of the statute till FY 2009-10 and up to Rs 10,000 from FY 2010-11 to FY 2014-15 have been extinguished. The status of these extinguished demands can be viewed on the income tax portal under the tab ‘Response to outstanding demand.
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