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Vivad Se Vishwas scheme

Topics Covered: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

Vivad Se Vishwas scheme:


Context:

The Income Tax Department on Friday extended the deadline for filing declarations and making payment under the direct tax dispute resolution scheme ‘Vivad Se Vishwas’ (VsV) till March 31 and April 30.

About the Scheme:

  • The Direct Tax ‘Vivad se Vishwas’ Act, 2020 was enacted on March 17, 2020, with the objective to reduce pending income tax litigation, generate timely revenue for the government and to benefit taxpayers.
  • The scheme aims to end litigation and legacy disputes under the direct taxes category as ₹9.32 lakh crore worth of revenue is blocked in approximately 4.8 lakh appeals pending at various income tax appellate forums.
  • The entities who opt for the scheme have to pay a requisite tax following which all litigation against them are closed by the tax department and penal proceedings dropped.

Significance of the Scheme:

It should be noted that the response to the scheme gains significance given earlier schemes like Kar Vivad Samadhan Scheme, 1998 (KVSS) and Direct Tax Dispute Resolution Scheme, 2016 (DTDRS) did not yield much results.

  • The scheme has reportedly received an overwhelming response with a settlement amount of over Rs 97,000 crore as of February.
  • So far, over 1,25,144 of the 5,10,491 long-pending cases have been settled under the scheme.
  • These comprise 24.5 per cent of the total number of such cases which were pending before the scheme was introduced.

InstaLinks:

Prelims Link:

  1. Key features.
  2. Benefits.
  3. Eligibility.

Mains Link:

Discuss the significance of the scheme.

Sources: the Hindu.