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Vivad se Vishwas Scheme For Setting Direct Tax Disputes: Know Details

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On Wednesday, in the Lok Sabha there was tabled the Direct Tax Vivad Se Vishwas Bill, 2020 based on which the Centre aims to cut down as many as 4.8 lakh tax litigations amounting to Rs. 9.32 lakh crore as on November 30,2019. In the scheme, the concerned taxpayers on settling the despite by the last day of the current financial year will be able to get a waiver on both penalty and interest amount if any.

Vivad se Vishwas Scheme For Setting Direct Tax Disputes: Know Details
 

Nonetheless, if the scheme is opted for after the cut-off date of March 31, 2020 then taxpayers would need to dole out the disputed tax amount together with 10% extra.

The scheme has been designed on the lines of a similar scheme worked out for indirect tax that was announced in Budget 2019 and the window for the same closed on January 15, 2020.

Tax disputes that can be settled under Vivad se Vishwas scheme

All of the cases related to direct tax pending before Commissioner (Appeals), Income Tax Appellate Tribunal, high courts or the Supreme Court as on January 31, 2020 can be settled under the scheme.

Also, if the tax dispute relates to only disputed penalty or interest amount then taxpayers availing the scheme will have to pay only 25% of the disputed amount before March 31, 2020. And in case you approach the taxman post this cut-off date for the resolution then penalty and interest equivalent to 30% of disputed amount shall be payable.

When announcing the scheme in the Budget 2020, Sitharaman said the scheme primarily puts its focus on trust building. And it would not be open-ended and closure of the scheme shall be notified at a later date.

Citing the rationale of the scheme, the government said that disputed amount is equivalent to one-year's direct tax revenues for the centre. Further it added that settling then involves huge amount of energy, resource and time on the part of both taxpayers and government.

GoodReturns.in

Read more about: direct tax interest penalty
Story first published: Thursday, February 6, 2020, 9:55 [IST]
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