Why Are Some People Seeing Old Income Tax Demands, Interest Accrual On The e-Portal? Are You One Of Them? Know What To Do | Personal Finance News

New Delhi: Income tax demands from the previous years such as 2005 to 2011 have unexpectedly started to appear on the income tax portal, according to a report by The Economic Times. According to the report, in many of these situations, the interest amount has exceeded the principal tax amount, causing major difficulty to taxpayers.

This comes as an unexpected surprise to many taxpayers since many of them had not received any notice or were unaware of the assessment orders at the time.

Why are old tax demands surfacing now?

According to the report, the Income Tax Department is digitizing and integrating old and disorganized records into a digital system. During this effort, assessment orders from many years ago and the corresponding tax demands are now being uploaded to the income tax portal. 

What do taxpayers say?

Taxpayers said that they do not remember receiving any notice at that time. They claim that no follow-up or reminder was provided over the years. Therefore, people assumed that nothing was outstanding. Taxpayers who never received the order or had it sent to the wrong address are now required to pay the outstanding amount.

Interest charges add to taxpayers’ anxiety

As the income tax demands from the previous years have started to appear on the income tax portal, the biggest problem for the taxpayers now is the interest. As arrears accumulate over time, the interest amount often becomes equal to or even greater than the principal tax amount. Taxpayers are of the view that if they had received the assessment order or demand notice on time, they could have filed an appeal and avoided the hefty interest burden.

Tricky situation for both taxpayers and authorities 

The issue of income tax demands from the previous years appearing on the income tax portal has created a tricky situation for both taxpayers and the authorities. While the demands may be genuine, the department may find it difficult to establish that statutory notices and assessment orders were duly issued years ago.