The Central Board of Direct Taxes' (CBDT's) decision to not pursue pending cases of income tax demand below Rs 20 lakh can cost the exchequer more than Rs 1,000 crore, reported Business Standard .

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As per the new rule, the tax department will have to withdraw 90,356 appeals pending before the Income Tax Appellate Tribunal (ITAT) and high courts, the report said citing an unnamed senior tax official.

The move aims to reduce the litigation process by 50 percent and allow the tax department to focus on fewer, but important cases, to recover more dues, the official told the newspaper.

The new limits are Rs 20 lakh, Rs 50 lakh and Rs 1 crore to file the appeals.