Quick Summary
The Central Board of Direct Taxes (CBDT) issued Circular No. 15/2024 on November 4, 2024, defining monetary thresholds for income tax authorities regarding the waiver or reduction of interest under Section 220(2) of the Income-tax Act, 1961. This section pertains to the interest payable due to non-payment of demanded tax following a notice issued under Section 156 of the Act. The interest accrues at 1% per month or part thereof until payment.
Key Highlights of the Circular
1. Specified Monetary Limits
- Principal Commissioners/Commissioners (Pr.CIT/CIT): Authorized to waive or reduce interest for amounts up to Rs. 50 lakhs.
- Chief Commissioners/Director Generals of Income Tax (CCIT/DGIT): Can handle cases involving amounts between Rs. 50 lakhs and Rs. 1.5 crore.
- Principal Chief Commissioners (Pr.CCIT): Have jurisdiction over cases exceeding Rs. 1.5 crore.
2. Conditions for Waiver or Reduction
The power to reduce or waive interest is contingent upon:
- Genuine Hardship: The payment must cause significant difficulty for the assessee.
- Uncontrollable Circumstances: The default must have occurred due to reasons beyond the assessee’s control.
- Cooperation with Authorities: The taxpayer must have cooperated with the inquiry or proceedings related to the tax assessment or recovery.
Implementation
This circular is effective from the date of issue. The move aims to streamline the administration of interest waivers, balancing taxpayer relief and fiscal responsibility.
Official copy of the circular has been attached
FAQ :
Section 220(2) of the Income-tax Act, 1961, deals with the interest payable on demanded tax that has not been paid following a notice issued under Section 156. This interest accrues at 1% per month or part thereof until payment.
The circular sets new monetary thresholds for income tax authorities to waive or reduce interest under Section 220(2) of the Income-tax Act, aiming to streamline the process.
Principal Commissioners/Commissioners can waive interest up to £50 lakh. Chief Commissioners/Director Generals of Income Tax can handle amounts between £50 lakh and £1.5 crore. Principal Chief Commissioners have jurisdiction over cases exceeding £1.5 crore.
An interest waiver is contingent upon the payment causing genuine hardship to the assessee, the default occurring due to circumstances beyond the assessee's control, and the taxpayer cooperating with authorities.
The circular is effective from the date of its issue, which was November 4, 2024.
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