Experts: Relax 20% pre-deposit rule for stay on I-T demand

IN A BID to free up working capital and ease the burden of businesses, tax experts have urged the government to relax the provisions of submitting a pre-deposit amount in case any business wishes to get a stay on an income tax demand, in the upcoming Budget.

- PRIYANSH VERMA

Experts say the pre-deposit amount, which sometimes is to the tune of hundreds of crores of rupees, leaves a dent on the financial liquidity of the company, as the process of dispute resolution is sluggish in the country. According to section 254 of the Income Tax Act, any taxpayer is mandated to pre-deposit 20% of the outstanding tax demand for a stay on that demand from the Income Tax Appellate Tribunal (ITAT).