The Central Board of Direct Taxes (CBDT) issued Circular No. 15/2024 on 4th November 2024, specifying monetary limits for various authorities granting such relief. The powers are distributed as follows: Pr. CIT/CIT can handle cases where the interest amount is up to Rs. 50 lakh; CCIT/DGIT for amounts between Rs. 50 lakh and Rs. 1.5 crore; and Pr. CCIT for amounts exceeding Rs. 1.5 crore. This structure ensures that requests are handled by the appropriate level of authority based on the size of the tax demand.
To qualify for a reduction or waiver, the taxpayer must meet specific conditions. The hardship test requires that the payment of the interest would cause genuine financial hardship. Additionally, the delay must have been due to circumstances beyond the taxpayer’s control, such as administrative errors or unavoidable situations. Furthermore, the taxpayer must have cooperated in the assessment or recovery proceedings related to the outstanding dues.
The circular aims to ensure that interest reductions or waivers are applied consistently and transparently. While the law provides a framework for granting relief, it also makes clear that taxpayers who intentionally delay payments or fail to comply with assessment procedures will not benefit from these provisions.
This circular, effective from the date of its issue, offers taxpayers a clearer path to seek relief from the burden of interest in genuine cases of hardship. By specifying the monetary limits and conditions for interest reduction or waiver, the CBDT ensures a more equitable application of the law and supports taxpayers facing genuine challenges.
