Income Tax department, vide their Instruction No. 11/2007, Dated 18.12.2007 has instructed that no demand would be raised in cases where default/demand is for amount of Rs. 100 or less.

Under the present system, processing of electronically filed e-TDS returns is to be done by the RRCs. After initiation of bulk processing by RCCs, the TDS Assessing Officer assesses the mismatch report and issues show-cause notices for follow-up action. In large number of cases, the demand is for amounts lesser than Rs 100/-.

Presently, the department ignores the demand in cases where amounts are lesser than Rs 5/-, where the demand is rounded off to zero.

As issuance of show cause notice, follow up of demands raised and for their compliances, the cost is more than Rs 100/- per case, the department has decided to allow the Assessing Officers to ignore such cases and drop the demand where the demand/default is up to a level of Rs.100 or less.

However, the department is quick to warn DDOs to be careful in future so as to ensure that they do not become habitual in short deduction of tax.

These instructions will come into force immediately.