NEW DELHI: Income tax cases being arbitrated abroad will be eligible to be taken up under the proposed ‘Vivad se Vishwas’ scheme, tabled in Parliament on February 5, aimed at providing for resolution of pending tax disputes, the department said on Saturday. Under the scheme, a taxpayer can settle a litigation by paying the tax on the disputed income, and get a full waiver of interest and penalty. The scheme seeks to meet two major objectives: reduce time and effort spent over long drawn litigation (~5 lakh cases), with the overall objective of improving ease of doing business in India and facilitate tax collection (~`9 lakh crore of disputed tax) by the government stuck under litigation.
Under the eligibility head, it said the scheme 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 on the January 31, 2020 or where orders where time limit for filing appeal has not expired as on January 31, and all search cases where the disputed demand is less than `5 crore. The declarant will have to file a declaration before the authority to opt for such a scheme; writs or appeals filed by taxpayers or the department and cases in arbitration in India or abroad.
According to the I-T department, the scheme will cover all disputes related to tax, penalty, interest, fee, tax deducted at source or tax collected at source. The scheme has provided options to the taxpayer either to pay notional tax on the disputed amount and take the benefit of claimed losses and/or accept the reduced losses and pay nothing after accepting the additions and settle the penalty. That’s a favourable provision for taxpayers who have huge losses and are planning to shut down their businesses.
What it covers
The scheme will cover all disputes related to tax, penalty, interest, fee, TDS or tax collected at source