Reducing income tax disputes in India | A way forward
Reducing tax disputes -The way forward (a) Reducing pending tax litigation A number of initiatives have been taken to reduce pending tax litigation (as listed in Section G and Annexure 2). The additional measure taken by the government in the Budget 2020 is the proposal for a legacy tax dispute resolution
scheme for which a legislation has been introduced in the parliament as detailed earlier. The inspiration for this comes from the dispute resolution scheme used in case of the legacy indirect tax disputes -the Sabka Vishwas Scheme (Legacy Dispute Resolution) 2019 (SVLRDS-2019), which
was in place from September 2019 to 15 January 2020 (see Annexure 3 for scheme details). Per the latest reports, it has led to closing of about 189,000 tax disputes. The SLRDS-2019 envisaged graded relief to the extent of 70 percent of disputed tax demands (see Figure 6 below).
Figure 6: Reliefs under the Sabka Vishwas Scheme 2019 Tax dues linked to (a) Show cause notice (SCN)/appeals pending as on 30.06.2019 (b) SCN issued only with respect to late fee/penalty, and tax amount is paid or Nil (c) Amount relating to arrears of tax or amount indicated in returns but not paid
INR 50 lakhs or less More than INR 50 lakhs 70% 50% Entire amount of late fee/penalty 60%
40%
(d) Enquiry/investigation/audit and amount quantified on 70% 50% or before 30.06.2019 (e) Voluntary disclosure by the declarant No tax relief except interest and penalty 14
