The Vivad se Vishwas Bill was passed by the Lok Sabha with certain amendments on March 4, 2020 amidst chaos and clamour over Delhi violence. The bill aims to settle all the pending direct tax disputes in the country.
The direct tax bill 2020 was tabled in the lower house of the Parliament on March 2. It was announced during the Union Budget 2020 presentation and received the approval of the Union Cabinet on February 12.
The bill seeks to resolve around 4.83 lakh direct tax cases that are currently pending in the various appellate forums of the country including the High Courts and the Supreme Court.
Vivad se Vishwas Bill: Objective
The Vivad se Vishwas Bill seeks to provide the taxpayers with an opportunity to settle all their direct tax disputes within the ongoing financial year by waiving of interest and penalty on their pending taxes. The legislation will benefit those who have pending direct tax disputes in multiple forums.
Vivad se Vishwas Bill: Key Details
• Under the proposed law, the taxpayers willing to settle their tax disputes will be allowed a complete waiver on interest and penalty, provided they pay the entire disputed amount by March 31, 2020.
• After March 31, the taxpayers will be liable to pay 10 per cent additional disputed tax over and above the existing tax liability.
• In case of arrears related to disputed interest or penalty then, 25 percent of the disputed penalty or interest will have to be paid if the payment is done by March 31, 2020.
• After the set deadline, instead of 25 percent, the taxpayers will have to pay 30 percent of the disputed penalty or interest as arrear.
• Once the bill is passed by both the houses of the Parliament, it can be available in the tax recoveries amounting to Rs 5 crore. The scheme will remain open till June 30, 2020.
There are over 4.83 lakh direct tax cases locked in disputes in different forums including India’s Income Tax Appellate Tribunal (ITAT), Commissioner (Appeals), Debt Recovery Tribunals, High Courts and the Supreme Court. The cases are worth at least Rs 9.32 lakh crore.