The Ministry of Finance has released comprehensive guidelines to streamline the handling of delayed tax refund claims and loss carry forward applications. These guidelines aim to reduce bureaucratic delays, especially in cases where taxpayers missed filing their income tax returns (ITR) but had refunds due. A tiered authority system and specific time limits have been introduced, making the process smoother and quicker.
Crux of the Guidelines
The new circular from the Central Board of Direct Taxes (CBDT) under the Ministry of Finance introduces a structured approach to condonation of delay applications. Taxpayers will no longer need to approach higher authorities if the tax refund amount increases, and a five-year time limit has been imposed for filing condonation applications.
Tiered Authority Structure
- Claims Up to Rs 1 Crore: Principal Commissioners of Income-tax (Pr. CsIT/CsIT) can process these claims.
- Claims Between Rs 1-3 Crore: Chief Commissioners of Income-tax (CCsIT) handle claims in this range.
- Claims Above Rs 3 Crore: Principal Chief Commissioners of Income-tax (Pr. CCsIT) process higher claims.
Time Limits and Conditions
- Strict Five-Year Limit: A five-year limit from the end of the assessment year applies, with all claims filed after October 1, 2024, falling under this rule.
- Court-related Refunds: The period of court proceedings is excluded from the five-year limit. Applications must be filed within six months of the court order or the end of the financial year, whichever is later.
- Supplementary Refund Claims: Allowed under certain conditions but with no interest payable on late claims.
Streamlined Processing and Reduced Hurdles:
Authorities must dispose of refund applications within six months of receipt. The new norms aim to foster trust by ensuring timely refunds, reducing the need for taxpayer intervention, and improving compliance ease. These guidelines represent a step towards simplifying the tax administration process for taxpayers.