Income tax department
The Income Tax Department has announced a big relief for small taxpayers. For those who had trouble due to wrong tax demands, now there is a chance to pay the outstanding amount without any interest till 31 December. This step is a relief news for those taxpayers, who had to pay additional tax due to the system’s mistake.
What was the problem?
Under Section 87A of the Income Tax Act, taxpayers with taxable income up to Rs 7 lakh get tax exemption. This means that these people do not have to pay tax or their tax bill is very low. But this discount only applies to normal income, such as income from job or business. On certain special income, this discount does not get this discount on the benefits (capital gains) of shares, earnings of lottery etc.
However, due to technical mistakes in the system, some taxpayers also got this exemption on special income. When this mistake was caught and corrected, these people suddenly got a new demand for tax, which surprised them. Many people had received the refund first, but now that amount was asked back from them.
Relief of Income Tax Department
CBDT (Central Board of Direct Taxes) has made a new rule by understanding this problem. Now the taxpayers who pay their revised tax demand by December 31, 2025, will not have to pay interest. In general, interest is charged on paying tax late, but this time this interest has been waived so that the taxpayers do not get additional burden.
If someone pays after this date, then interest will be charged. Therefore, the department has advised the taxpayers to clear their outstanding tax before 31 December. This relief scheme is only for taxpayers whose cases have been made due to the system of system, not for those who deliberately show less tax.
What is section 220 (2)?
Under Section 220 (2) of the Income Tax Act, interest is imposed if tax is not paid on time. Usually, when the tax notice comes, interest starts on not paying within 30 days. But in this case, CBDT has waived this interest by 31 December so that the taxpayer feels relieved.
Why is this relief necessary?
Many small taxpayers were happy thinking that their tax bill has been completely cleared. But when his new demands came due to the mistakes of the system, they were very stressed. Through this new relief, they can pay their outstanding taxes without any additional financial pressure.
What to do for taxpayers?
If you have received the revised tax notice and you want to pay the outstanding amount, then pay it before December 31, 2025. This will not worry about interest. If paid after this date, you will have to pay with interest. Therefore, avoiding it can be harmful.