Income Tax Department Explains The Adjusted Tax Refunds Of Startups

Adjustment Made On Tax Refunds Of Startups Now Explained By IT Department

Highlights:

  • As of now, Rs. 9,000 crore has been released in tax refunds
  • IT Department explain why adjustments made to tax refunds of startups
  • Over 1.7 lakh incomes tax assessees have been clarified of the same via emails

As many complaints surface where the startups claim they are being “arm-twisted” by adjusting their outstandings with the refunds, on Tuesday, the Income Tax Department clarified that emails about the matter were sent to close to 1.72 lakh Income Tax Assessees following the law.

The Central Board of Direct Taxes (CBDT), in a statement, said that its emails which sought clarification from all those who were entitled to get a tax refund but also had outstanding tax to pay cannot be misconstructed as harassment.

The emails which were sent were auto-generated and were sent as per the Section 245 of the Income Tax Act in cases of refund where there is any outstanding demand payable by the assessee. In case the outstanding demand has already been paid or in certain cases if there has been a stay implemented by the higher tax authorities, the taxpayer will have to, through these emails, the status update so that at the time of issuing the refund the amount is not held back and the refunds are released smoothly.

The CBDT said that such communications (emails in this case) are just a request where it seeks an update response from the assessee for the proposed adjustment of the refund with the outstanding demand and cannot be misconstructed as a notice of recovery or should not be perceived as so called arm-twisting by the IT Department. CBDT says that the department is duty-bound to protect the public money by adjusting the outstanding demand before the refund is released.

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Explaining the existing procedure pertaining to the recovery of the outstanding demands in case of an assessee, the CBDT said that an opportunity is given by the department to the taxpayer where can either clear the outstanding demand or intimate the status of the said demand to the department.

The CBDT further requested start-ups to respond to its emails at the earliest so that further necessary action can be taken by the I-T Department to release the refunds immediately.

In order to provide the taxpayers with a sigh of relief, the Income-tax Department has rushed the process of issuing all the pending Income tax Refunds up to Rs. 5 lakh. The department said that as of today the CBDT has issued almost 14 lakh refunds which comes out to be of a value of more than Rs. 9,000 crore to the taxpayers.

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Aishwarya Chopra

A news content writer with a bachelor’s degree in Mass Communications and has over 4 years of experience. Aishwarya is fluent in multiple languages and covers different domains of news for XploringIndia.in. In the past, she has worked as a freelancer and curated multiple articles for various websites.

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