A plan to detangle old tax disputes

Disputed tax demands up to ₹25,000 till FY2009-10, and up to ₹10,000 for FY2010-11 to FY2014-15 scheduled to be withdrawn

- Shipra Singh

Finance minister Nirmala Sitharaman has proposed that outstanding disputed tax demands for specific periods and amounts will be taken back. In her interim budget speech, she said that demands up to ₹25,000 pertaining to the period up to the financial year 2009-10 and up to ₹10,000 for financial years 2010-11 to 2014-15 be withdrawn.

The purpose of this move is to improve taxpayer services, she said in her interim budget speech. "There are a large number of petty, non-verified, non-reconciled or disputed direct tax demands, many of them dating as far back as the year 1962, which continue to remain on the books, causing anxiety to honest tax payers and hindering refunds of subsequent years."

Vishwas Panjiar, partner, Nangia Andersen LLP, said the department would undertake necessary formalities to cancel such outstanding demands suo moto without requiring the taxpayer to make a formal application. "If the underlying tax demand is nullified, as a logical corollary, the tax department should withdraw all pending associated litigation as well."