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Vivad Se Vishwas scheme

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Topics Covered: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Vivad Se Vishwas scheme

What to study?

For Prelims: Key features of the scheme.

For Mains: Need for and significance.

Context: The vivad se vishwas scheme was announced by Union Finance Minister Nirmala Sitharaman during her budget speech on February 1, 2020. The scheme aims to settle the huge number of pending direct tax cases.

About Vivad Se Vishwas Scheme: The Direct Tax Vivad Se Vishwas Bill, 2020:

  1. The amnesty scheme, at present, covers disputes pending at the level of commissioner (appeals), Income Tax Appellate Tribunals (ITAT), high courts, the Supreme Court and those in international arbitration.
  2. It offers a complete waiver on interest and penalty to the taxpayers who pay their pending taxes by March 31.
  3. The scheme aims to benefit those whose tax demands are locked in dispute in multiple forums.
  4. If a taxpayer is not able to pay direct taxes by March 31st then, he will get further time till June 30th. However, in that case, he would have to pay 10 percent more on the tax.

How much?

  1. In case it is just the interest and the penalty which is in dispute, the taxpayer will have to pay 25% of the disputed amount till March 31, and subsequently, it will be 30%.
  2. If a taxpayer is not able to pay within the March 31 deadline, he gets a further time till June 30, but in that case, he would have to pay 10% more on the tax.
  3. In case it is just the interest and the penalty which is in dispute, the taxpayer will have to pay 25% of the disputed amount till March 31, and subsequently, it will be 30%.

Significance:

The scheme aims to resolve 483,000 direct tax-related disputes pending in various appellate forums.

Sources: the Hindu.