What does the taxman do when the money market dries up and businesses struggle? It tries to figure out a way to inch towards a punishing tax target that the government has set by giving a little breathing space to companies and businesses — the prime taxpayers. Mumbai, which accounts for the highest contribution to income tax in the country, is trying it out. Amid tight liquidity and a tough business environment, tax commissioners in the financial capital decided on Monday to allow “deserving” assessees pay in instalments the amount they are required to fork out after challenging a tax demand order. After receiving a demand order from the assessing officer of the Income Tax (I-T) department, a tax payer has to pay 20% of the demand within a month once the order is challenged before the Commissioner of Income Tax (Appeals), the first appellate authority. This amount can now be paid in multiple instalments till end March. “However, this will be on a case to case basis and is not part of any rule. Instructions have gone out to commissioners in Mumbai to consider genuine requests from assesses so that don’t have to pay the entire 20% at one go.
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