2024-11-05 05:33:00
According to the circular issued late night Monday, principal chief commissioners of Income Tax can waive up to Rs. 50 lakhs, chief commissioners or director generals of Income Tax can waive between Rs. 50 lakhs and Rs. 1.5 crores, and principal chief commissioners of Income Tax can waive interest above Rs. 1.5 crores.
The notification will be effective Tuesday.
The interest waiver or reduction will be considered if payment of the amount would cause genuine hardship to the taxpayer, or if default was due to circumstances beyond their control, the circular said.
Taxpayers must also co-operate in assessment or recovery proceedings, the circular added.
While there was provision to waive interest in the reducing or waiving interest payable under Section 220(2) of the Income-tax Act, there was no monetary limit for the waiver.Experts say the move aims to streamline the process and provide relief to taxpayers facing genuine hardships.”The circular simplifies the waiver process for compliant taxpayers, while safeguards help minimize misuse,” Rajat Mohan, senior Partner, AMRG and Associates said.
“Although a surge in waiver requests may initially impact tax collections during the transition period, the overall effect on revenue is expected to be minimal, reinforcing the circular’s balance between taxpayer support and fiscal responsibility,” he added.
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**Interview with Tax Expert, Mr. Rajesh Khanna**
**Interviewer:** Good morning, Mr. Khanna! Thank you for joining us today. The recent circular from the CBDT regarding the waiver or reduction of interest on tax payments has generated quite a buzz. Can you explain the key points of this announcement?
**Mr. Khanna:** Good morning! Yes, absolutely. The CBDT has introduced monetary limits for waiving or reducing interest on tax payments, which aim to ease the burden on taxpayers facing genuine hardship. The circular outlines that principal chief commissioners can waive amounts up to Rs. 50 lakhs, while chief commissioners have the authority for amounts between Rs. 50 lakhs and Rs. 1.5 crores. For anything above Rs. 1.5 crores, only principal chief commissioners can grant waivers.
**Interviewer:** That’s quite significant. What conditions must taxpayers meet to be eligible for this waiver?
**Mr. Khanna:** The waiver or reduction will be considered if the payment would cause genuine hardship or if the taxpayer’s default was due to circumstances beyond their control. It’s crucial for taxpayers to cooperate in any assessment or recovery proceedings as part of this process.
**Interviewer:** When does this new provision come into effect?
**Mr. Khanna:** The notification is effective immediately from the date it was issued, which is today. Taxpayers now have the opportunity to apply under these new provisions.
**Interviewer:** How do you think this move will impact the taxpayer community?
**Mr. Khanna:** This initiative can be a great relief for many taxpayers, especially in the current economic climate where many are still recovering from financial strains. It shows the government’s intention to address the challenges faced by taxpayers, promoting a more supportive environment.
**Interviewer:** Thank you for your insights, Mr. Khanna. It’s crucial information for our viewers.
**Mr. Khanna:** Thank you for having me!
