The Ministry of Finance has published new guidelines to handle delayed tax refund claims and loss carry forward claims. The new guidelines issued on Tuesday increase the tax refund claim amount limit to waive cases of delay, which will help taxpayers who did not file any ITR even though they were due a tax refund.
“…this circular is issued to address applications for condonation of delay in filing returns claiming reimbursement and returns claiming transfer of loss and compensation thereof containing complete guidelines on the conditions of condonation and the procedures to be followed. follow to decide such matters,” the Central Board of Direct Taxes (CBDT) under the Finance Ministry said in a circular.
“This improvement in jurisdictional boundaries will significantly streamline the delay forgiveness process for tax refunds, allowing taxpayers to receive their refunds faster and with fewer bureaucratic hurdles, especially for higher value claims. It builds trust and improves ease of compliance for taxpayers,” said Amit Bansal, Partner, Singhania & Co.
Key points:
Tiered authority structure: The circular establishes a three-tier system for processing requests based on claim amounts:
Claim amount: less than or equal to 1 million rupees
– The Chief Commissioners of Income Tax/Commissioners of Income Tax (Pr. CsIT/CsIT) will have the authority to accept or reject applications if the amount claimed is less than or equal to Rs 1 crore for an assessment year.
Claim amount: between 1 and 3 million rupees
The Chief Commissioners of Income Tax (CCsIT) will have the authority to accept or reject applications if the amount claimed is Rs 1 crore but does not exceed Rs 3 crore.
Claim Amount: More than 3 million rupees
The Principal Chief Commissioners of Income Tax (Pr. CCsIT) will have the authority to accept or reject applications if the amount claimed exceeds Rs 3 million.
Time limit: A strict limit of five years from the end of the assessment year has been imposed for filing condonation applications. This rule applies to all applications submitted on or after October 1, 2024.
Processing time: Authorities must dispose of applications within six months of receiving them.
Judicial claims: For refund claims arising from court orders, the duration of the judicial process will be excluded from the five-year limit. Applications must be made within six months of the court order or by the end of the financial year, whichever is later.
Supplemental Claims: A late application for a supplemental claim for reimbursement (claiming an additional amount of reimbursement after completion of the assessment for the same year) may be allowed for forgiveness as long as other conditions mentioned above are met. The powers of acceptance/rejection within monetary limits delegated to the Pr.CCsIT/CCsIT/Pr.CsIT/CsIT in case of returns requesting refund and supplementary refund claims would be subject to the following additional conditions;
Yo. The income of the assessee is not accessible in the hands of any other person under any of the provisions of the Act.
ii. Interest will not be allowed in case of late claim for refunds.
III. The refund has occurred as a result of excess tax deducted/collected at source and/or excess advance payment of tax and/or excess payment of self-assessment tax as provided in the Law.
No interest for late claims: The circular specifies that no interest will be allowed for late claims.
Extension of Verification: It is also provided that the Commissioner of Income Tax, Central Processing Center (CPC), Bengaluru may accept or reject petitions under section 119(2)(b) of the Act seeking condonation of the delay in verification of income refund by submitting the ITR-V to the centralized processing cell (CPC), Bengaluru, within the prescribed time limit.
The new guidelines aim to streamline the process of managing delayed tax refund claims and loss transfer requests, providing clarity to both taxpayers and tax authorities.
First published: October 2, 2024 | 20:10 IS
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