CA Kishore Bardia
The bill proposes that taxpayers can settle their tax dispute before the last date of 31 December, 2020. In this, they have to pay only the basic amount of tax in selected cases.
The government has proposed a direct tax dispute resolution scheme. Its name is ‘Vivad se Vishwas scheme.
A bill related to this has been brought in the Parliament. It is related to settling of dispute cases involving direct taxes.
Q. What do the experts say?
Ans. CA Kishore Baradia, partner at Jain Bardia & Company, says this is a very good move. It was desperately needed. It was long awaited. This will eliminate many cases pending for years. Tax authorities should also make them aware of this scheme as much as possible . They said that people should take advantage of this once best opportunity.
Q. What does the bill introduced in parliament says ?
Ans. The bill introduced in Parliament says that the government will notify the last date of the scheme. However, Finance Minister Nirmala Sitharaman had said in her budget speech that the last date of the scheme would be 30 June 2020. But due to COVID-19, date has been extended till 31 December 2020. Under this scheme, taxpayers can settle their old tax dispute with the government at no extra charge. This decision of the government will surely provide more relief to the taxpayers.
Q. Who can take advantage of the scheme?
Ans. According to the bill, till 31 January 2020, the scheme will be applicable on those tax cases which were pending before the Commissioner (Appeals), Income Tax Appellate Tribunal, High Court or Supreme Court. The pending appeal may be related to tax dispute, penalty or interest. It can also be related to assessment or re-assessment.
Q. What amount will have to be paid?
Ans. Taxpayers who have a dispute with the Income Tax Department will have to pay fees as per the cases mentioned below.
- Where there are disputes due to “tax arrears”
According to the bill, where the ‘tax arrears’ is equal to the total ‘disputed tax, interest or penalty charged’, only disputed tax will have to be paid before 31 January 2020 .
In fact, at present, 4.00 lakh cases worth Rs 9.50 lakh crores are pending in all the courts of our country. Keeping this view the government has extended the last date of this scheme to 31 March 2019, if the taxpayer takes advantage of the scheme after 1 April 2021, then an additional 10% tax will have to be paid along with the disputed tax amount.
- Where the dispute is regarding penalty or interest.
In cases where there is a dispute with the tax department regarding interest or penalty, the disputed interest or penalty can be settled by paying 25 per cent of disputed amount.
Q. How does the scheme work?
Ans. According to the details of the scheme in the bill, the authorized officer will decide the amount due within 15 days that the taxpayer will disclose in his declaration. After this, a certificate will be issued to the taxpayer. After determining it, tax arrears or amount due will be intimated . The amount intimated after the assessment has to be paid by the taxpayer. This work has to be done within 15 days of getting the certificate. By doing this, he has to give information to the authorized officer. It will then authorized officer will pass the order stating that the taxpayer has deposited the amount.
CA Kishore Bardia said , “This scheme covers all the cases pending till 31 January, 2020. This is a good opportunity. Taxpayers can settle their dispute and start afresh.
Q. Who can not take advantage of the scheme?
Ans. The scheme will not be availed in the outstanding tax cases which are related to the cases mentioned below.
- In relation to the assessment year in which an assessment has been made under section 153A or section 153C.
- In relation to the assessment year where the liability has been proved before filing the declaration.
- Income from any source from outside the country and it has undisclosed .
- The scheme will not be available in cases related to section 90 or section 90 of Income tax Act.
- Against whom the order of custody has been passed before filing the declaration under various provisions.
(The expert is partner at Jain Bardia and Company and Chairman of Raipur Branch of CIRC of ICAI)