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New Delhi, April 17 (IANS): After providing relief to smaller taxpayers hit by the coronavirus pandemic, the government may now extend the benefit of accelerated tax refunds to large taxpayers and companies that are equally looking at fiscal incentives from the government to have enough liquidity to survive the present crisis.
Official sources said that the thinking is now that taxpayers who have refunds in excess of INR 5 lakh should also be provided relief and the process could be initiated as early as beginning of next week.
On April 8, the government had announced that it has directed the income tax department to clear all pending income tax refunds up to INR 5 lakh immediately to benefit around 14 lakh taxpayers.
It also decided to issue all pending GST and Customs refunds to provide relief to around 1 lakh business entities. The total refund to be granted under the scheme was estimated at around INR 18,000 crore.
"The government seems to be adopting a phased approach to providing relief to various segments of the economy hit by disruptions created by the Covid-19 spread. It first extended various compliance measures and then provided a package for the most vulnerable and poor sections of the society.
"Today the RBI has provided relief to the SME and NBFC segments. It seems that a phase wise plan to cater to the needs of different segments of India Inc. will start now," said an industry source privy the development, asking not to be named.
There has been speculation about a package much larger than the INR 1.7 lakh crore economic stimulus announced last month. But the idea now seems to have smaller packages, in phases, to address specific concerns of various sectors.
Income tax refunds for large taxpayers will have a much larger play than INR 18,000 crore that the government intends to provide as refunds under its first programme.
Though smaller taxpayers comprise over 90 per cent of individuals in India, it is the top 8-10 per cent who pay over 60 per cent of the taxes. So, the amount of refunds for this segment would also be substantially higher.
In pursuance to the government's decision to issue pending income tax refunds up to INR 5 lakh in order to help taxpayers amid the Covid-19 pandemic situation, the Central Board of Direct taxes (CBDT) on April 15 said that it has already issued over 10.2 lakh refunds totalling to around INR 4,250 crore as on April 14, 2020.
These refunds are over and above the 2.50 crore refunds already issued in FY 19-20 till March 31, totalling to INR 1.84 lakh crore.
The CBDT further said that about 1.75 lakh more refunds are in the process of issuance in this week. These refunds would get credited directly to the taxpayers' bank accounts in 5-7 business days from the date of issuance.