Punjab Government Grants Two-Month Extension for Tax Settlement Scheme
The Punjab government, led by Finance Minister Harpal Singh Cheema, announced on Saturday a significant two-month extension for the One Time Settlement (OTS) scheme for recovery of outstanding dues, 2025. Originally scheduled to conclude on March 31, 2026, the final date for submitting applications has now been officially extended to May 31, 2026.
Current Progress and Financial Impact
According to Finance Minister Cheema, the state's taxation department has already received 9,151 applications under the current scheme, resulting in a total revenue realisation of Rs 134.21 crore. In a move to encourage compliance, the government has extended waivers amounting to Rs 446.17 crore to eligible taxpayers.
"This extension provides a final opportunity for eligible taxpayers to resolve their pending dues and secure financial relief," Cheema stated. He emphasized that the taxation department has proactively identified 8,000 properties belonging to tax defaulters, which will face auction proceedings soon if they fail to act on this last chance.
Historical Context and Participation Trends
Cheema provided insights into previous settlement schemes to highlight the current participation gap. He noted that OTS-2 in the fiscal year 2022-23 saw the receipt and disposal of 2,487 applications, while OTS-3 in 2023-24 recorded the disposal of approximately 70,000 applications.
"It suggests that a large segment of eligible taxpayers has yet to avail themselves of the benefits under the current 2025 scheme," he explained, indicating that many potential beneficiaries remain unregistered despite the program's advantages.
Rationale Behind the Extension
The decision to grant this latest extension was based on feedback received by the state government, with three primary objectives:
- Maximising taxpayer participation to ensure broader access to relief measures.
- Reducing ongoing litigation by resolving disputes out of court.
- Facilitating enhanced revenue realisation for the state treasury through increased settlements.
Final Warning to Defaulters
Cheema issued a stern "warning" to intentional defaulters, clarifying that this will be the absolute final window of opportunity. "The taxpayers who fail to participate in the scheme by the May 31, 2026, deadline will face severe recovery proceedings in strict accordance with the law," he asserted.
He added that the taxation department has already proactively identified a substantial number of default cases, underscoring the government's preparedness to enforce compliance if necessary.
This extension aims to balance taxpayer relief with revenue recovery, offering a last chance for resolution before stringent actions are implemented.
