Wednesday, May 25, 2022

income tax: Income tax refund of this amount will not be paid by tax dept

Did you get an intimation from the revenue tax division after processing of your revenue tax return, for a tax demand or tax refund quantity of lower than Rs 100? When you have, then you might be neither liable to pay such tax demand quantity nor will you obtain such refund quantity in your pre-validated checking account. Such tax demand dues can be adjusted in opposition to future revenue tax refunds.

Right here is why.

“The Authorities vide a press observe dated January 05, 2012, clarified that demand of lower than Rs 100 wouldn’t be enforced however is responsible for adjustment in opposition to future refunds. Thus, any tax dues lower than Rs 100 could be carried ahead for the aim of set-off in opposition to the refunds of any future years,” says Dr Suresh Surana, founder, RSM India, a tax consultancy agency.

Sec 143 (1) notices despatched by the revenue tax division to taxpayers after processing their returns additionally point out the above in circumstances the place there’s a refund or tax demand of lower than Rs 100.

Corroborating this view, Abhishek Soni, CEO and founder,, an ITR submitting agency says, “Virtually, we now have noticed that if the quantity of revenue tax refund is under Rs 100 then it isn’t processed by the revenue tax division. Additionally, if the tax demand quantity is under Rs 100 then additionally deposit of the identical isn’t demanded by the revenue tax division.”

Surana says, “There isn’t any extant process supplied both below the Revenue-tax Act or by the use of any notification or round for the therapy of such demand of lower than Rs 100, nevertheless, virtually fee in the direction of such miniscule demand of earlier 12 months isn’t enforced, except there’s a refund within the subsequent 12 months/s and the demand is proposed to be adjusted in opposition to such refund.”

“Do needless to say if there are taxes payable earlier than the submitting of ITR, say Rs 50, then such fee of taxes have to be made or else you will be unable to file ITR,” says Soni.

Why was press observe issued by the federal government in 2012

The press observe was issued by the federal government as many taxpayers in 2012 acquired tax demand notices from the division for the fee of even minuscule tax dues of Re 1, Rs 4, Rs 6 and many others.

“It has been reported in some sections of the press that the Central Processing Centre, Bangalore is sending notices for fee of taxes that are as small as Rs 1, 4, 6, inflicting pointless hardship to assessees. It has been argued that when refunds for quantities lower than Rs 100 aren’t issued by the revenue tax division, then the demand for lower than Rs 100 must also not be collected,” stated the press launch issued at the moment.

The press launch additional stated, “The revenue tax division has created a central repository of all calls for for higher demand administration as required by Standing Committee of Parliament and C&AG. To realize this, all officers had been requested to collate demand mendacity at varied locations viz. IRLA, TMS and guide registers and add onto CPC portal. This was additionally a part of the annual motion plan. Consequently, AOs have uploaded the identical. Throughout a gathering with Bangalore Chartered Accountants affiliation, it was instructed that taxpayers must also learn about the identical in order to allow them to take crucial motion if the excellent calls for had been incorrect. This measure was geared toward offering better transparency. Due to this fact, a communication has been despatched to taxpayers informing them about current arrears. It might be clarified that this communication isn’t a requirement discover. This measure is, in truth, an assessee -friendly train. The division has additionally written to all chief commissioners to amend such entries, if discovered incorrect, when approached by taxpayers. This might appropriate the database if a taxpayer has proof of fee and many others. As per extant process, demand of lower than Rs 100 isn’t enforced however is responsible for adjustment in opposition to future refunds.”

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