Key features & Updates of the Vivad se Vishwas Scheme – 2020
“Vivad se vishwas scheme has been extended till 31st December, 2020 due to covid19 in India”. Now, no Penalty & Interest will be there if the scheme is availed till 31st December, 2020.
Key Updates about the scheme:
- Government has extended the deadline for making payments under the ‘Vivad se Vishwas Scheme’ (tax dispute settlement scheme), from 31st December to 31st March 2021, on condition that a person must appeal for it on or before 31st December 2020”
- Vivad se Vishwas scheme will be applicable to taxpayers who have filed appeals for resolving disputed tax, interest or penalty matters with the Income-tax Appellate Tribunal, the Commissioner (Appeals), High Court or Supreme Court as on the 31st day of January 2020. It doesn’t matter whether the tax demand is such cases are pending or has been paid.
- As per the Vivad se Vishwas Scheme, the “tax arrears” is the total aggregate amount of disputed tax, penalty implied on such disputed tax and interest chargeable or charged on such disputed tax, then such amount has to be paid to the government by taxpayers before 31st December, 2020.
Those taxpayers who avail of this scheme on or after 1st April 2020 have to pay an additional 10% of the total disputed tax. Although, if such an additional 10% amount is higher than the aggregate amount of interest and penalty chargeable or charged on disputed tax, then the excess amount will be simply ignored for the purpose of calculation. - A taxpayer is required to pay 25 percent of the disputed interest or disputed penalty or disputed fee before 30th June 2020, if the dispute has arisen with the income tax department related to disputed income, penalty or fee.
For taxpayers availing benefit of this scheme or after 1st April 2020 would be required to pay 30 per cent of the disputed penalty or disputed fee or disputed interest to the tax authority. - As per the scheme, the designated authority will declare the total amount payable by the declarant or taxpayer within 15 days, starting from the date of receiving receipt of the declaration under this Act. This declared tax amount payable by the taxpayer will be decided by the authority on the basis of provisions of this Act (the scheme). The designated authority will also provide a certificate to the declarant, which will highlight the information amount of tax arrears and total payment amount after such determination.
- The taxpayers should also pay the required amount identified by the designated authority within 15 days, starting from receiving the receipt of the certificate, which contains details about such payment to be paid to the designated authority in a prescribed form.
- The (Vivad se Vishwas) scheme also highlights the point that once the taxpayers decide to resolve the dispute with the tax authority under this scheme, then the amount payable would be considered final and such cases will not be opened again for proceeding under the Income Tax Act.
The designated authority would not be entitled to impose, apply or levy any penalty or interest under the Income Tax Act in respect to tax arrears in this scheme. - The scheme is eligible to the following cases:
a) Cases pending as on 31st January, 2020 before CIT, Income Tax Appellate Tribunal (ITAT), High Courts or the Supreme Court.
b) Cases where orders were passed but the time limit for filing appeals not expired as on 31st January, 2020.
c) Cases against Dispute Resolution Panel (DRP)
d) Cases where AO has not given any orders.
e) Cases pending before Cit under section 264 of the Income Tax Act, 1961 - Tax dispute settlement scheme (Vivad se Vishwas) will not be applicable for the taxpayers in tax arrears related disputes as given below:
a) The scheme will not be applicable for an assessment year where the assessment has been made under section 153A or section 153C of the IT Act if it is related to any tax arrear.
b) For an assessment year where the prosecution has been instituted on or before the date of filing of declaration.
c) Any disclosed income from a foreign source outside India or any undisclosed assets outside India.
d) For an assessment or reassessment that has been made as per the agreement highlighted in section 90 or section 90A of the Income-tax Act.
e) The scheme will not be applicable in cases where the appeal before the Commissioner in regard to the notice of enhancement has been made under section 251 of the Income Tax Act.
f) The scheme will also not be applicable to any individual against whom an order of detention has been passed under the provisions of Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 on or before the filing of declaration. - In case the designated authorities issue certificates under Section 5(1) under IT Act, the appeal pending with the ITAT or the CIT (A) would be deemed as automatically withdrawn.
- The declaration must file an application regarding the withdrawal of writ of petition to the High Court or the Supreme Court if the petition is pending with the court regarding tax dues.
- Wherever each proceeding for arbitration, conciliation or negotiation has been begun or a notice thereof has been provided in way of any law or agreement inserted into by India with any other country or territory outside India including for the security of investment, the declarant shall file an application for withdrawal of the claim.
- Step wise procedure to file a declaration under VSV schemes:
a) Login to I-T portal.
b) Click on the Vivad Se Vishwas tab.
c) Prepare and Submit DTVSV Form.
d) Select the year and the filing type.
e) Fill Form-1 correctly.
f) Fill Form-2 as a final submission.
g) File the required documents properly.
h) File them with DSC or EVC accordingly.
i) Make the payment within 15 days in Form-3 issued by I-T Department.
j) The order for settlement will be issued by the department.
This is a golden opportunity for the taxpayers where the chance of staying or winning the case is weak. Taxpayers should not miss this opportunity to settle the tax disputes.
