Raised tax appeal limits lead to Rs 16,690 crore drop in disputed tax demand: Govt
New Delhi, Aug 3
The increase in monetary thresholds for filing departmental tax dispute appeals before appellate forums has led to an estimated reduction of about Rs 16,690 crore in disputed tax demand, the government informed Parliament on Monday.
In a written reply to the Lok Sabha, Union Finance Minister Nirmala Sitharaman said the enhanced monetary limits, notified after the Union Budget 2024-25, resulted in thousands of departmental appeals being withdrawn or not filed before the Income Tax Appellate Tribunal (ITAT), high courts and the Supreme Court.
According to her, 443 cases were withdrawn and 11,390 appeals were not filed before the ITAT, leading to an estimated reduction in disputed tax demand of Rs 3,662.82 crore.
Before the high courts, 4,791 cases were withdrawn while 5,565 appeals were not filed, resulting in an estimated reduction of Rs 9,218.71 crore in disputed tax demand.
At the Supreme Court, 744 cases were withdrawn and appeals were not filed in 534 cases, reducing disputed tax demand by an estimated Rs 3,807.15 crore.
Overall, the estimated reduction in disputed tax demand across the three appellate forums stood at Rs 16,690 crore, FM Sitharaman said.
Moreover, through the Union Budget 2024-25, the government had raised the monetary limits for filing departmental appeals in direct tax matters to Rs 60 lakh before the ITAT, Rs 2 crore before high courts and Rs 5 crore before the Supreme Court, with effect from September 17, 2024.
FM Sitharaman also noted that the Central Board of Direct Taxes (CBDT) has undertaken several measures over the past 12 years to simplify tax compliance and improve taxpayer services.
These include the introduction of pre-filled income tax returns, the revamped Form 26AS, the facility to file updated returns, faceless assessment and appeal schemes, removal of higher TDS/TCS provisions for non-filers of income tax returns, rationalisation of the safe harbour regime and expansion of the presumptive taxation scheme.
— IANS
Reader Comments
Good step but I wish they'd also address the root cause - why are so many disputes arising in the first place? The assessment process needs to be fairer. Still, better than before, at least for small taxpayers.
As a CA, I see this from both sides. The department was wasting resources appealing small matters, but the new limits mean many cases will now be decided only by tribunals. This could leave some taxpayers without proper appellate remedy. Need to watch how it pans out.
Interesting approach. In the US, similar thresholds help manage caseloads effectively. The faceless assessment and pre-filled returns mentioned here are progressive steps that many countries could learn from. Good to see India modernizing its tax system. 🇮🇳
This is good news for honest taxpayers who were stuck in endless litigation. But I'm concerned about the Rs 60 lakh limit for ITAT - that's still a lot for a small business owner to fight on their own if the department disagrees. Need more taxpayer-friendly reforms.
As someone who follows global tax policy, this is a smart fiscal move. Reducing litigation costs and focusing resources on larger, substantive disputes is something many OECD countries practice. The estimated savings of Rs 16,690 crore is substantial.
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