Feb 06, 2020
No interest or penalty till March end
The Direct Tax Vivad Se Vishwas Bill, 2020, tabled in the Lok Sabha on Wednesday seeks to cut down on nearly 4.8 lakh tax disputes involving an amount of Rs 9.32 lakh crore (up to November 30, 2019) by giving the taxpayers the facility to escape interest on the disputed tax amount and any penalty. All direct tax-related cases pending before the Commissioner (Appeals), Income Tax Appellate Tribunal, high courts or the Supreme Court as on January 31, 2020 are eligible for the scheme.
The scheme provides that if a taxpayer avails it by March 31, 2020, then he would get complete waiver of interest and penalty. However, a taxpayer who chooses the scheme post this cut-off date will have to pay the disputed tax and 10% of it extra.
Further, if the tax arrears relate to disputed interest or penalty only, then only 25% of disputed penalty/interest is payable if scheme is availed by March 31. Cases coming for resolution after this date would have to pay 30% of penalty and interest.
Introducing the Bill, finance minister Nirmala Sitharaman said it emphasises on trust building. The scheme, she said, would not be open-ended. The government will later notify the end date for the scheme.
Rakesh Nangia, chairman, Nangia Andersen Consulting, said: “This can be a very beneficial scheme for settlement for cases such as additions of unexplained cash deposited during demonetisation period, additions for penny stocks, etc.