CA Pooja Madhan

Introduction

Vivad Se Vishwas Scheme, 2020 was introduced by the Finance Act, 2020 with an objective of reducing the pending income tax litigation, generating revenue for the Government on time and help tax payers by reducing their tax burden by providing them waiver of interest and penalty and also giving immunity from prosecution.

Deadline for opting for the Scheme

The deadline for opting for the Vivad Se Vishwas Scheme, 2020 is now 31st December which is been extended for the second time earlier the deadline was 30th June, 2020  which was first extended from 31st March, 2020 amid COVID-19 breakdown in the country.

Who is eligible for opting under Vivad Se Vishwas Scheme scheme?

Following taxpayers are eligible to opt for the scheme;

  1. Appeals, Writs, SLPs, arbitration filed on or before 31st January, 2020 either by department  or by taxpayer.
  2. Orders for which the deadline of filing appeal has not been elapsed on 31st January, 2020.
  3. Cases pending with the Dispute Resolution Penal (DPR).
  4. Where DPR has issued direction on or before 31st January, 2020 but the order has not yet passed.
  5. Cases where revision application has been filed by the assessee under Section 264 on or before 31st January, 2020.
  6. Disputes where payment has already been made shall also be eligible.

What are the payments terms under the scheme?

The following terms of payment will be used for opting for the scheme

Payment deadlineAppeals/Writs/SLPs/Aribitration which relates to Disputed TaxAppeals/Writs/SLPs/Aribitration which related only to disputed penalty/interest/fee
31st December, 2020100% of the amount of Disputed Tax/complete waiver of interest and penalty (125% in search cases)25% of the amount of disputed penalty/interest/fee

Ineligibility for the Scheme

Following cases shall not be eligible to opt for the Vivad Se Vishwas Scheme, 2020

  1. In search cases where the disputed tax in a financial year is more than Rs. 5 Cr.
  2. Cases where the prosecution has already been initiated by the department under Income Tax Act or under Indian Penal Code.
  3. Cases which involved undisclosed foreign income and assets.
  4. Cases where order has been passed on the basis of information received from the foreign jurisdiction.
  5. 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. 
  6. Cases covered under Narcotic Drugs and Psychotropic Substances Act, Unlawful Activities (Prevention) Act,Ø 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.