Direct tax Scheme – Vivad se Vishwas Scheme 2020

Vivad se Vishwas Scheme 2020 Under Income-tax Act 1961

Finance Ministry, in its Finance Budget dated 1^st February 2020, had announced of launching a dispute settlement scheme namely "The Direct Tax Vivad se Vishwas Bill, 2020" The scheme is aimed to achieve an object to resolve the direct taxes disputes pending before various judicial forums such as CIT(A), Income-tax Appellate Tribunal, High Court and Supreme Court.

In short, in the case assessees having any direct tax appeal(s) related to disputed tax, interest, penalty or fee pending as on 31 January 2020 are eligible for resolution under this Scheme subject to certain prescribed exceptions. Whereas considering the current situation of covid19 and the difficulties being faced by the people at large, the Centre Government, vide Notification No. 85/202 dated 27^th October 2020 has extended the date of filing of the declaration on or before 31st December 2020 and also the date of payment on or before 31st March 2021.

Insights of the scheme :

(i)          Dispute pertains to tax, interest chargeable or charged on such disputed tax or penalty leviable or levied on such disputed tax, only 100% of the disputed tax (125 % of dispute tax in case search cases) is required to be paid and the interest and penalty will be waived (subject to fulfilment of conditions).

(ii)        Dispute pertains to interest, penalty or fees, only 25% of such disputed interest, penalty or fees is required to be paid and the balance amount shall be waived (subject to fulfilment of conditions).

(iii)       Dispute pertains to tax, interest chargeable or charged on such disputed tax or penalty leviable or levied on such disputed tax, only 50% of the disputed tax in the case of appeal filed by the Department (62.5 % of dispute tax in case search cases) is required to be paid and the interest and penalty will be waived (subject to fulfilment of conditions).