The government is looking to resolve the old income tax disputes having atleast Rs. 8 lakh crore through one-time amnesty.
How this plan will benefit to taxpayers?
- Help to reduce the volume of tax litigation significantly,
- Help taxpayers to spend their time, resources and energy on more productive matters,
- Help to make India a more business-friendly nation.
However, the plan benefits will depend on actual implementation of the scheme. There are many cases which are more than 12 years old and still stuck due to litigation matters and it can’t be sured how effectively this scheme will work.
Government had also asked for the scheme under Direct Tax Code, which has also the aim of reducing the tax case litigations in the country. It was a one-time amnesty window but only for three or four months.
However, this scheme could not be successful because it demanded full payment of disputed tax, with full interest, and it only reduced penalty amount.
In the budget also, it was announced “Sabka Vishwas” legacy dispute resolution scheme for solving the cases and litigations related to excise and service tax. The Indirect tax’s amnesty scheme waives both interest and penalty amounts along with the reduction of disputed tax amount.
However, nothing was mentioned related to the issues, litigations and disputes arised on the matter of direct tax as direct tax matters are to be examined by task force.
The task force was headed by Arbind Modi as the member (legislation) at Central Board of Direct Taxes (CBDT). After his retirement, his successor Akhilesh Ranjan was made the head of the task force.
Experts are hoping that the amnesty scheme is similar to Sabka Vishwas, which will be in the favor of taxpayers (since data shows that 70% of such litigation are in favour of taxpayers).
As per trends and Insights,
- 4,65,349 cases are pending at various tribunals and courts. On March 31, 2018,
- Amount having Rs. 6,38,000 Crore is pending at the Income Tax Commissioner (Appeals) [ICT-A] level,
- Rs 4,96,000 crore are pending at the Income Tax Appellate Tribunal, High Courts and the Supreme Court.
- In 2016 also, Rs. 8,20,741 Crore was stuck in direct tax matters.