Finance Minister Nirmala Sitharaman moves Direct Tax 'Vivad Se Vishwas' Bill, 2020 in Lok Sabha

Finance Minister Nirmala Sitharaman moved the Direct Tax 'Vivad Se Vishwas' Bill, 2020 for consideration and passing in the Lok Sabha on Monday.

In her remarks, the Minister said that the bill would pave the way to provide resolution of disputed tax and related matters as there are 4.83 lakh cases amounting to over Rs 9 lakh crore related to direct tax are pending in different appellate forums including High Courts and Supreme Court. She also said that the bill will provide an opportunity to litigants to settle their disputes.

About the 'Vivad Se Vishwas' Bill, 2020

The bill aims at reducing litigations in the direct taxes payments. Under the 'Vivad Se Vishwas' scheme, taxpayers whose tax demands are locked in dispute in multiple forums can pay due to taxes by March 31, 2020, and get a complete waiver of interest and penalty.

Under the scheme, 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 per cent more on the tax.

The 'Vivad Se Vishwas' scheme for resolving income tax cases was announced during the 2020-21 Budget by Finance Minister Nirmala Sitharaman.

The amount payable by the appellant for resolution of disputes will be determined based on whether the dispute relates to the payment of tax, or payment of interest, penalty, or fee. Further, the person is required to pay an additional amount if such payment is made after March 31, 2020.

Under the scheme, the designated authority cannot levy interest or penalty concerning that dispute after the dispute is resolved. Further, no appellate forum can decide about the matter of dispute once it is resolved.

Such matters cannot be reopened in any proceeding under any law, including the IT Act.