On February 5, the Honourable Finance Minister Mrs. Nirmala Sitharaman introduced ‘Vivad Se Vishwas’ Bill , within a few days of its announcement of the Finance Budget. It aims to provide for resolution of disputed direct taxes in a speedy manner. Finance Minister had said that “in the past our Government has taken several measures to reduce tax litigations.
The Finance Minister had clarified that “under the proposed Vivad Se Vishwas scheme, 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 by March 31, 2020. Those who avail this scheme after March 31, 2020 will have to pay some additional amount”
The provisions of the Bill regarding the amount payable by the declarant is provided as under:
Subject to the provisions of this Act, where a declarant files under the provisions of this Act on or before the last date, a declaration to the designated authority in accordance with the provisions of section 4 in respect of tax arrear, then, notwithstanding anything contained in the Income-tax Act or any other law for the time being in force, the amount payable by the declarant under this Act shall be as under.
Interpretation of the provisions of the Bill is as follows:
The provision says that those declarants who enroll into the scheme on or before 31.03.2020 will be at an advantage of having to pay a lower amount than those who enroll on or after 01.04.2020. The last date of enrolling into the scheme is 30.06.2020.
There are 3 kinds of scenarios possible viz:
1.All eligible Cases (except search u/s 132 or s.132A): Tax arrears = Disputed tax + interest chargeable/ charged on such disputed tax + penalty leviable/levied.
| On or before 31.03.2020 | On or before 01.04.2020 |
| 100% of the Disputed tax | 110% of the Disputed tax
(subject to the maximum amount of the aggregate of tax arrears, interest and penalty) |
2. Cases under search u/s 132 or s. 132A: Disputed tax + interest chargeable/ charged on such disputed tax + penalty leviable/levied.
| On or before 31.03.2020 | On or before 01.04.2020 |
| 125% of Disputed tax
(subject to the maximum amount of the aggregate of tax arrears, interest on disputed tax and penalty) |
135% of Disputed tax
(subject to the maximum amount of the aggregate of tax arrears, interest on disputed tax and penalty) |
3. Cases without the disputed tax element: Tax arrears = Disputed interest and/or disputed penalty and/or disputed fee.
| On or before 31.03.2020 | On or before 01.04.2020 |
| 25% of disputed interest/ penalty/disputed fee | 30% of disputed interest/ penalty/disputed fee |
Note: In case of taxpayers appeal, if any issue is already covered in favor of the taxpayer by the appellate authority, the amount payable is reduced to 50% of the amount stated above.
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