The Government of Maharashtra has introduced the Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fee (Amendment and Validation) Bill, 2026 in the Legislative Assembly on 25th February 2026. The Bill seeks to amend key provisions of the existing Maharashtra Settlement of Arrears Act, 2025 (Mah. XVII of 2025) to facilitate smoother settlement processes for government bodies, public sector undertakings and other eligible entities.
Through this amendment, the State Government has proposed to extend the last date for payment of the requisite amount from 31 December 2025 to 31 March 2026, in view of several representations received from eligible government bodies and public sector undertakings who were unable to withdraw their appeals or complete the required procedures within the earlier deadline due to pendency of cases before various appellate forums.
The Bill also amends Section 11 of the principal Act to permit partial withdrawal of appeals, allowing applicants to withdraw appeals only for distinct and severable issues that they intend to settle without affecting the pendency of the remaining issues. Payments made earlier will either be adjusted issue-wise or proportionately, depending on whether such payments can be clearly identified. Additionally, the Bill contains a validation provision to legally recognize all payments of tax, interest, penalty or late fee made after 31 December 2025 until the commencement of the 2026 Amendment Act, declaring such payments to be duly and validly collected and barring any claims or court proceedings for refunds of these amounts.
The Statement of Objects and Reasons clarifies that the amendment aims to support government entities by providing more time and flexibility in availing settlement benefits, while ensuring legal clarity in payment adjustments. The Bill has no financial implications for the Consolidated Fund of the State and has been published under the authority of the Governor of Maharashtra.
The Complete Notification can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2026/03/mh-bill-23022026.pdf
