1. Direct Tax Vivad se Vishwas Scheme is Applicable for all pending income tax, TDS appeals pending before CIT , ITAT, HC, SC and also for orders passed for which time limit for further appeal is not expired and appeals which are not admitted by courts as on 31.01.2020.
2. Direct Tax Vivad se Vishwas Scheme is also applicable for pending special leave petitions, Writ petitions, Arbitrations relating to income tax, TDS as at 31.01.2020.
3. Direct Tax Vivad se Vishwas Scheme is not applicable for the following issues:
* Wealth Tax, Equalisation levy, CTT and STT issues
* Tax issues pending before Advance ruling authority.
* Search and seizure issues where tax liability > 5 crores
* Prosecution has been instituted against the assessee.
* Application for waiver of interest under sections 234A, 234B, 234C of the ITA
* Cases relating to undisclosed foreign assets/ income.
4. Tax, interest and penalty payable under Direct Tax Vivad se Vishwas Scheme
| Payment Date | Category A – Disputed tax along with interest, fee and penalty | Category B – Only interest, fee and penalty | |
| Before 31 March 2020 | 100% (125% for search cases) of the disputed tax amount;
complete waiver on interest, fee and penalty |
25% of the amount of interest, fee and penalty | |
| After 31 March 2020 but before closure of scheme | 100% (125% for search cases) plus additional 10% of the disputed tax amount;
complete waiver on interest, fee and penalty |
30% of the amount of interest, fee and penalty | |
| In case department has filed the appeal | |||
| Before 31 March 2020 | 50% (62.5% for search cases) of the disputed tax amount;
complete waiver on interest, fee and penalty |
12.5% of the amount of interest, fee and penalty | |
| After 31 March 2020 but before closure of scheme | 50% (62.5% for search cases) plus additional 10% of the disputed tax amount; | 15% of the amount of interest, fee and penalty | |
Points to ponder related to Direct Tax Vivad se Vishwas Scheme:
- The entire disputed tax and interest paid even before the applying for scheme shall be refunded if the assessee opts for the scheme but no interest under section 244A will be granted.
- The assessee has to apply for the scheme in the prescribed form. The department shall issue the certificate determining the disputed tax, penalty or interest as per scheme. The assessee declarant shall pay the amount determined within fifteen days of the date of receipt of the certificate and intimate the details of such payment.
- The last date for such payment is fixed at 31.03.2020.The department is expected to extend the base date of 31.03.2020 under the scheme as the forms are not prescribed till date.
- The scheme shall be applied for all issues pending in appeal in cases where the taxpayer has a very high chance of winning certain grounds in an appeal. Thus the tax payer is forced to pay the tax for the issues likely to be won by him.
- In TDS cases settled under the scheme consequential relief of allowable expenditure under proviso to section 40(a) (i)/ (ia) in the year in which the tax was required to be deducted.
- The scheme does not have clarity on whether instalment payments are available for the amount determined under scheme.
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