Home / Business and Economy / Old Tax Demands Resurface: Interest Exceeds Principal
Old Tax Demands Resurface: Interest Exceeds Principal
3 Jan
Summary
- Forgotten tax demands from 2005 onwards are reappearing on income tax portals.
- Accumulated interest often equals or surpasses the original unpaid tax amount.
- Tax authorities face challenges proving timely delivery of old demand notices.
Old income tax demands, some originating as early as 2005, are resurfacing on the income tax portal, leaving many taxpayers surprised and confused. In numerous cases, the accrued interest on these long-forgotten tax dues now matches or even surpasses the original principal amount. This sudden emergence of legacy demands is likely a consequence of the ongoing digitisation and consolidation of historical records within the tax department.
The situation presents a significant challenge for tax authorities, who must now attempt to retrieve and present proof of timely delivery for assessment and demand orders issued years ago. For taxpayers who never received these notices due to non-delivery or incorrect addresses, the opportunity to appeal and avoid mounting interest charges was lost. The onus is on the tax department to demonstrate that statutory notices were duly served through verifiable means like registered post or electronic modes.
Taxpayers encountering these demands, even if small, face the prospect of paying a deposit to obtain a stay while the issue is investigated. The digitisation, while aimed at efficiency, is causing difficulties in retrieving old documents for both parties. Experts advise taxpayers to retain their own payment and tax records meticulously to navigate such unexpected situations, especially during business transitions like mergers or demergers.
