Tax burden alleviated: Feeling overwhelmed by pending income tax payments? The Income Tax department has introduced a scheme to alleviate your burden, waiving income tax demands of up to Rs 1 lakh per individual.This decision, announced in the latest Budget and subsequently implemented by the Central Board of Direct Taxes (CBDT), encompasses various components of tax demands, including principal, interest, penalty, cess, and surcharge.

"The waiver of pending income tax demands up to Rs 1 lakh per individual will provide relief to taxpayers burdened by outstanding dues. The initiative is expected to alleviate financial stress for millions of taxpayers, and it will foster a more taxpayer-friendly environment," said Arpit Suri, CA and personal finance expert.

Tax demand waiver: AY 2010-11 to 2015-16

The waiver extends to outstanding tax demands for Assessment Year (AY) 2010-11 up to Rs 25,000 and for AY 2011-12 to 2015-16 up to Rs 10,000. It is estimated that approximately Rs 3,500 crore worth of tax will be withdrawn as a result of this initiative.

However, this remission does not apply to demands raised against tax deductors or collectors under Tax Deducted at Source (TDS) or Tax Collected at Source (TCS) provisions of the Income Tax Act. Moreover, any tax demand exceeding the specified limit of Rs 1 lakh per individual will not be considered for waiver.

Refund clarification

According to experts, taxpayers should not expect any claims for credit or refunds as a result of this waiver. Furthermore, the cancellation of demands does not offer immunity against ongoing or potential legal proceedings.

There are approximately 1.11 crore disputed tax demands, indicating the scale of relief this measure is set to provide for taxpayers.

Experts advise taxpayers to proactively check their online accounts for updates on extinguished demands. They can do so by navigating to "Pending Action > Response to Outstanding Demand" to verify the status of demands related to them.