CBDT Aims At Relaxed Direct Tax Regime: Raises Thresholds For Appeals To Courts In IT Disputes 

The Central Board of Direct Taxes (CBDT) through a circular on Thursday (8 August) has raised its thresholds for ‘tax effect’ or disputed tax amount with the tax payers for filing cases with the courts and tribunals, Mint has reported.

With fewer tax litigations being filed, the move by the CBDT is expected to relax the direct tax regime in the country. Monetary thresholds at all levels have been increased as per the circular and the new thresholds have been made applicable from Thursday itself.

For appeals to the Income Tax Appellate Tribunal (ITAT) the ‘tax effect’ under dispute must now exceed Rs 50 lakh, more than double the Rs 20 lakh amount earlier. Similarly, for appeals to the High Courts and Supreme Court the amount has been raised to Rs 1 crore and Rs 2 crore respectively, double the previous amounts.

With growth rates coming under pressure domestically following global trends, the move is likely to provide a boost to the Ease of Doing Business (EoDB) in India. A similar revision was earlier made in 2018. It will also cut down on backlogs and cases currently pending before the judiciary.

Commenting on the development, Ameet Patel, chairperson of the taxation committee at Bombay Chartered Accountants’ Society said, “The intent of the circular is clear: it aims to cut down on litigation. Thus it must be beneficially viewed. Further, CBDT in last year’s circular had explicitly said pending appeals below the specified tax limits may be withdrawn or not pressed. With the steep upward revisions in threshold, we may at one go see the backlogs in judicial dispute falling significantly as pending cases will be withdrawn.”