Overview : Vivad se Vishwas scheme has been introduced to reduce the number of litigations going on between Income Tax Department and Tax Payers. It is going to benefit all those taxpayers, who are willing to pay tax but are unwilling to pay interest and penalty.
Vivad se Vishwas scheme was announced by the Finance Minister in the Budget 2020 to settle tax disputes between taxpayers and the Income Tax Department. The scheme provides the waiver/reduced rate of interest and penalty to taxpayers with the full and final settlement.
Under this scheme, the cases related to direct tax, in which the taxpayer’s lawsuit is pending in any forum, will be resolved.
- Reduce pending litigation related to direct tax payments.
- Generate timely revenues for the Government
- This scheme will directly work to increase the trust between the taxpayer and the administration and to provide relief from the painful process of litigation.
Eligibility for the Scheme:-
- Appeals, writs, SLPs, arbitration (filed by Department or taxpayer) filed on or before 31 Jan 2020.
- Orders for which time for filing appeal has not expired on 31 Jan 2020.
- Cases pending before Dispute Resolution Panel (DRP).
- Cases where DRP issued direction on or before 31 Jan 2020 but order has not yet been passed.
- Cases where assessee filed revision application under section 264 on or before 31 Jan 2020.
- Dispute where payment has already been made shall also be eligible.
- The pending appeal, writ, SLP, arbitration could be against- *Disputed tax (including interest or penalty on such disputed tax) in relation to an assessment or reassessment order. * Disputed interest, disputed penalty or disputed fees where there is no disputed tax.
- Disputed tax can also include the tax determined on default in respect of tax deducted at source (TDS) or tax collected at source (TCS).
|Payment made on or before||Appeals, writ, SLP, arbitration relates to|
|Appeals, writ, SLP, arbitration relates only to disputed penalty or interest fees.|
|30th June,2020||100% of the disputed tax (125% in serach cases) [waiver of interest & penalty].||25% of the disputed penalty or interest fees.|
|After (30th June,2020)||110% of the disputed tax (135% in serach cases) [waiver of interest & penalty].||30% of the disputed penalty or interest fees.|
Where no appeals is pending but the case pending in arbitration, such cases are also eligible for the scheme. Disputed tax on the disputed income for which arbitration has been filed.
The scheme is not applicable to pending disputes before AAR (Authority for advance Ruling), in case the writ has been filed against the order of AAR, such case are covered.
The excess amount in comparison to the amount payable under the scheme will be refundable.
In case writ has been filed to challenge the validity of notice, such case are not covered as quantification of demand is not possible.
1. Cases relating to disputed tax, interest chargeable and penalty on such disputed tax.
|Type of cases||Amount payable upto (30-06-2020)||Amount payable on or after 01-07-2020|
|If an appeals is filed by a taxpayer, in whose case search and seziure have occured, and the disputed tax does not exceeds Rs. 5 crore.||Amount of disputed tax plus 25% of disputed tax.||Amount of disputed tax plus 35% of disputed tax.|
|If an appeal filed by a taxpayer, in any other cases.||Amount of disputed tax.||Amount of disputed tax plus 10% of disputed tax.|
|If an appelas filed by the department, in cases where search and seziure have occured, and the disputed tax does not exceeds Rs. 5 crore.||50% of disputed tax plus 12.5% of disputed tax.||50% of disputed tax 17.5% of disputed tax.|
|If any appeal is filed by the department, in any other cases.||50% of disputed tax.||50% of disputed tax plus 5% of disputed tax|
NOTE :- Where 25% or 35% or 17.5% or 12.5% or 10% or 5% of disputed tax, as the case may be, exceeds the total of interest and penalty, such excess amount shall be ignored.
2. Case relating to disputed interest, penalty, or disputed fees.
|Type of cases||Amount payable up to (30-06-2020)||Amount payable on or after 01-07-2020|
|If an any appeal filed by the taxpayer.||25% disputed interest, penalty or fees.||30% disputed interest, penalty or fees.|
|If an appeal file by the department.||12.5% disputed interest, penalty or fees.||15% disputed interest, penalty or fees.|
- Search cases if disputed tax in a year is more than Rs. 5 crore.
- Cases where prosecution has been initiated by the department under Income-tax Act or under Indian Penal Code.
- Cases involving undisclosed foreign income and assets.
- Cases completed on the basis of information received from foreign jurisdiction.
- Cases where person is notified under Special Courts(Trial of Offences Relating to Transactions in Securities) Act, 1992 or detained under Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974.
- Cases covered under Narcotic Drugs and Psychotropic Substances Act, Unlawful Activities (Prevention) Act,
- Prevention of Corruption Act, Conservation of Foreign Exchange and Prevention of Smuggling Activities Act,
- Prevention of Money Laundering Act, Prohibition of Benami Property Transactions Act.
- Consequent to such declaration and on fulfillment of conditions, all appeals, writs, SLPs, arbitration to be withdrawn (both by taxpayer and by department).
- Immunity to be granted from levy of interest, penalty and institution of any proceeding for prosecution for any offence under the Income-tax Act in respect of matters covered in the declaration.
- If excess payment made before filing declaration, refund shall be issued without interest.
- CBDT is proposed to be given power to issue such orders, instructions and directions to the income-tax authorities for the proper administration of the Act.
- Central Government is proposed to be given power to make rules for carrying out provision of this scheme.
- Central Government is proposed to be given power to remove difficulties by issuing appropriate orders not inconsistent with the scheme.
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