VIVAD SE VISHWAS SCHEME
The Government of India has extended the deadline of Vivad se Vishwas Scheme once again till December 31, 2020.
About the Scheme
This is An Immediate Tax Scheme announced in Budget 2020, for settling tax disputes between individuals and therefore the tax department. Earlier, the scheme offered complete waiver on interest and penalty to the taxpayers with a full and final settlement of the dispute if the scheme was availed by March 31, 2020. An individual choosing settlement after March 31, 2020 was required to pay additional 10 per cent penalty on the disputed tax amount.
As per the scheme tax disputes settled thereunder can't be reopened in the other proceeding by the tax department or the other designated authority.
The Government has extended the deadline of Vivad se Vishwas Scheme once again till December 31, 2020 which was earlier extended upto June 30, 2020 from March 31, 2020 for settling tax disputes, without paying any interest and penalty. This was announced by the Finance Minister Smt. Nirmala Sitharaman in a press conference.
As the Scheme is Scheduled to Close on December 31, 2020 this means that settlement of any dispute under the scheme now onwards till December 31, 2020 will not attract any penalty or interest.
As per the original scheme, when launched, tax dispute settlement under the scheme was to be allowed without payment of any interest or penalty only till March 31, 2020. A Penalty of 10% of disputed tax amount had to be paid if dispute was settled under the scheme after March 31 but before closure of scheme on December 31.
The extension has come after the country has gone into lockdown mode due to the rise in cases of COVID-19. Many chartered accountants and income tax official’s had urged the government for an extension as the scheme came into effect quite late - from March 17, 2020 and related forms and other rules of the scheme were notified on March 18, 2020. Thus, going by the earlier deadline of March 31, only 12 days would have been left to meet the deadline, after notification of forms/rules.
Best Thing about the Extension
The extension of the deadline will come as relief for those individuals who want to settle their tax disputes without paying additional 10 per cent penalty and interest. The extension also will provide a breather to those individuals who were yet to try to an analysis of the scheme and choose whether to choose it or not.
The income tax department is handling its twitter account which has been tweeting and answering all FAQs related to the scheme to clarify provisions and other aspects of the scheme.