If you are entangled in a long-standing tax dispute with the Income Tax Department and the amounts of interest and penalty are mounting with each passing month, there is an opportunity for you to avoid paying interest and penalty and get away clean by paying just outstanding tax payable till March 31, 2020.
In order to reduce litigation in indirect taxes, India’s first female Finance Minister Nirmala Sitharaman in her Budget Speech on 1 February 2020 proposed to introduce a new scheme – Vivaad se Vishwas.
The government had in 2019 brought in the “Sabka Vishwas (Legacy Dispute Resolution) Scheme”, to reduce litigation in direct tax matters, which received a good response. The scheme for settlement of indirect tax litigation had resulted in settling over 1,89,000 cases.
Pursuant to the Budget Speech, a bill was introduced in the Parliament on February 5, 2020 named “The Direct Tax Vivad se Vishwas Bill, 2020 (“the Scheme” or “the Bill”)” for dispute resolution related to direct taxes.
“Under the proposed bill, a taxpayer would be required to pay only the amount of the disputed taxes and will get complete waiver of interest and penalty provided he pays the required amount by March 31, 2020. Those who avail this scheme after March 31, 2020 will have to pay some additional amount,” said Dr. Suresh Surana, Founder, RSM India, adding, “It is expected to result in settling appeals pending at various appellate levels.”
“Any person who has tax arrears due to disputed tax, interest, penalty or fee and has filed an appeal before the appellate forum (Commissioner (Appeals) (‘CIT(A)’) or Income Tax Appellate Tribunal (‘ITAT’) or High Court (‘HC’) or Supreme Court (‘SC’)), where such appeal is pending on January 31, 2020 can apply under this Scheme by way of filing a declaration,” Dr. Surana further said.
So, it would be a golden opportunity for you not only to save on interest and penalty or outstanding tax, but to settle the dispute itself.
Source : Economic Times