Union Finance Minister Nirmala Sitharaman announced the introduction of the Vivad Se Vishwas scheme during her budget speech with a view to “provide for the resolution of pending tax disputes.” The scheme was introduced after the success of the “Sabka Vishwas Scheme,” which was introduced to reduce indirect tax disputes. The scheme provides a waiver from interest and penalty.
What the scheme entails
The bill shall apply to all the appeals filed by declarants or the Government, which are pending with the Commissioner (Appeals), DRP, Income-tax Appellate Tribunal, High Court or Supreme Court and revision cases that are pending before the CIT as of January 31, 2020, or where orders where the time limit for filing appeal has not expired as on January 31, and all search cases where the disputed demand is less than Rs 5 crore. The declarant will have to file a declaration before the authority to opt for such a scheme.
In October, the government extended the deadline for making payment under the direct tax dispute settlement scheme ‘Vivad Se Vishwas’ for the third time by three months to March 31, 2021. As per a Central Board of Direct Taxes (CBDT) notification, declaration under the Vivad se Vishwas Scheme shall be required to be furnished latest by December 31, 2020. However, the payment without an additional amount can now be made up to March 31, 2021.
It is pertinent to mention here that the Direct Tax Vivad se Vishwas Act, 2020 was enacted on 17th March 2020 with the objective to reduce pending income tax litigation, generate timely revenue for the Government, and to benefit taxpayers by providing them peace of mind, certainty, and savings on account of time and resources that would otherwise be spent on the long-drawn and vexatious litigation process……..Read More>>