Income Tax Circular: There is a relief news for income tax payers. The Central Board of Direct Taxes (CBDT) has decided to give some relaxation to the tax officers to reduce or waive the interest on tax payable on tax demand notice. This relaxation has been given under some special conditions.
New Income Tax Circular: There is a relief news for those who pay income tax. The Central Board of Direct Taxes (CBDT) has decided to give some exemption to the tax officers to reduce or waive the interest on the tax payable on the tax demand notice. This exemption has been given under certain special conditions, according to which the tax officers will now have the right to reduce the amount of interest or waive it completely.
The CBDT issued a circular on November 4 announcing the exemption, which will be applicable under sections 220(2) and 119(1) of the Income Tax Act. Under this, the authorities have been given the power to reduce or waive the interest paid or payable, but a certain monetary limit has been set for this.
What could be the interest rate?
Under section 220(2) of the Income Tax Act, if the taxpayer does not pay the tax mentioned in the tax demand notice, then he has to pay 1 per cent interest for every month. This interest increases based on the delay.
How much interest can be waived?
- CBDT’s circular states under what circumstances officers will get the right to waive or reduce interest:
- If the amount of interest payable is more than Rs 1.5 crore, then this decision can be taken by an officer of the rank of Principal Chief Commissioner.
- An officer of the rank of Chief Commissioner can decide on interest ranging from Rs 50 lakh to Rs 1.5 crore.
- The Principal Commissioner or Commissioner rank officer will have the right to reduce or waive interest up to Rs 50 lakh.
What will be the conditions?
There are some conditions to avail this exemption. First, if it is extremely difficult to pay the interest amount, or the taxpayer has not paid the interest due to some unavoidable reason, then it can be waived. The second condition is that if the taxpayer has cooperated with the authorities in any investigation or recovery of the outstanding amount, then also the interest can be waived.
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