2024-11-05 04:21:00
The Income Tax Department has set the three-layered monetary limit for reduction or waiver of interest on unpaid tax. This will help the assesses to approach the exact hierarchy to get relief.
According to an order issued by the Department, interest up to ₹50 lakhs can be reduced or waived by Principal Commissioner (Pr. CIT) or Commissioner (CIT). For amount between ₹50 lakhs but below ₹1.5 crore, Chief Commissioner (CCIT) or Director General of Income Tax (DGIT) has been empowered to provide relief. Amount above ₹1.5 crore can be reduced by waived by the Principal Chief Commissioner (Pr. CCIT).
There is no change in conditions for waiver or reduction. An assessee needs to satisfy all three conditions to get relief. First, payment of such amount has caused or would cause genuine hardship to the assessee. Second, default in the payment of the amount on which interest has been paid or was payable due to circumstances beyond the control of the assessee. And third the assessee has co-operated in any inquiry relating to the assessment or any proceeding for the recovery of any amount due from him.
Section 220 (2) of the Income Tax Act deals with the consequences of non-payment a taxpayer. If a taxpayer fails to pay the amount specified in any notice of demand under section 156 of the Act, she shall be liable to pay simple interest at the rate of 1 per month or part of the month for the period of delay in making the payment. Further, the law empowers the Principal Chief Commissioner (Pr. CCIT) or Chief Commissioner (CCIT) or Principal Commissioner (Pr. CIT) or Commissioner (CIT) for reduction or waiver of the amount.
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**Interview with Tax Expert on New Income Tax Department Measures for Interest Waivers**
**Host:** Welcome to our program! Today we have with us Mr. Rajesh Kumar, a tax consultant with over a decade of experience. He’s here to discuss recent changes in the Income Tax Department regarding the waiver and reduction of interest on unpaid taxes. Rajesh, thank you for joining us.
**Rajesh Kumar:** Thank you for having me!
**Host:** Let’s dive right in. The Income Tax Department has set a monetary limit for interest waivers. Can you explain what this means for taxpayers?
**Rajesh Kumar:** Absolutely. This new order categorizes the limits based on the amount of unpaid tax. For example, for amounts up to ₹50 lakhs, either the Principal Commissioner or the Commissioner can provide relief. For amounts between ₹50 lakhs and below ₹1.5 crore, the Chief Commissioner or the Director-General has that authority, and for amounts above ₹1.5 crore, only the Principal Chief Commissioner can grant waivers.
**Host:** Interesting! What are the conditions that taxpayers must meet to qualify for these waivers?
**Rajesh Kumar:** There are three key conditions. First, the taxpayer must demonstrate that the payment has caused genuine hardship. Second, any default in payment should be due to circumstances beyond the taxpayer’s control. Lastly, the taxpayer must have cooperated fully in any inquiries related to their tax assessment.
**Host:** How does the Income Tax Act address the consequences of non-payment?
**Rajesh Kumar:** Section 220(2) of the Income Tax Act states that if a taxpayer fails to pay the specified amount, they are liable to pay simple interest at a rate of 1% per month on the outstanding amount. This can add up quite significantly, which is why knowing about these waivers can be crucial.
**Host:** Do you think this new framework will be beneficial for taxpayers, especially those facing financial difficulties?
**Rajesh Kumar:** Yes, I believe it will provide much-needed relief to those who are genuinely struggling. The structured approach allows them to approach the right authority, and if they meet the criteria, it can significantly ease their financial burden.
**Host:** This sounds like a positive step forward. Any final thoughts for our listeners?
**Rajesh Kumar:** I encourage taxpayers to familiarize themselves with these provisions. If they believe they qualify, seeking advice from a tax professional can help them navigate the process effectively.
**Host:** Thank you, Rajesh, for sharing your insights today. We hope our listeners find this information helpful.
**Rajesh Kumar:** Thank you for having me!
