The central Board of Direct Taxes (CBDT) on Thursday issued detailed frequently asked questions (FAQs) to provide clarity on direct tax legacy dispute resolution scheme – ''Vivad Se Vishwas''.
The FAQs, to soothe nerves of curious taxpayers, said that a declarant has to deposit the disputed tax amount within 15 days after determination of the tax liability by the designated authority under the scheme.
The FAQs also clarified that cases regarding wealth, securities transaction, commodity transaction taxes and equalisation levy will not be covered under the scheme.
The FAQs were released in response to various queries received by the tax department after the budget announcement of the scheme.
On Wednesday, the lower house of Parliament had passed the Direct Tax Vivad Se Vishwas Bill. However, the Bill now needs to be passed by Rajya Sabha and the government will have to obtain a Presidential assent before notifying the scheme.
According to the CBDT, 4.83 lakh direct tax cases involving Rs 9.32 lakh crore in disputed taxes are locked in various appellate forums such as Commissioner (Appeals), ITAT, debt recovery tribunals, high courts, and the Supreme Court, which are likely to get unlocked through this scheme.
Interestingly, this amount is the almost 82 percent of the government's direct tax revenue in FY19.
The FAQ clarified that in cases where the revenue department has gone in for appeal, the taxpayer will have to pay 50 percent of the disputed tax (62.5% in search cases) and/or 12.5 percent of the disputed penalty, interest or fee by March 31.
“The FAQs have provided clarity in certain areas and would help taxpayers. The government is trying its best to provide enough clarity so that taxpayers can go for this scheme. Taxpayers on the hand need to quickly decide whether to go for the scheme or not, “ said Amit Maheshwari, partner at Ashok Maheshwary & Associates LLP.