The Central Board of Direct Taxes (CBDT) on Tuesday published a fresh set of FAQs on the Direct Tax Vivad se Vishwas scheme in response to additional queries received by it.
The fresh FAQs mainly address the ambiguities around eligibility criteria and computation of amount payable under the scheme.
The scheme, announced during the Budget, provides for dispute resolution in respect of pending income tax litigation. The objective of the scheme is to reduce pending tax litigation, generate timely revenue for the government and benefit taxpayers by providing them peace of mind, certainty and savings on account of time and resources that would otherwise be spent on the long-drawn and vexatious litigation process, the CBDT said in a notification.
The scheme is applicable only in relation to appeals filed on or before July 22, 2024 which led to many doubts among taxpayers such as whether they will be eligible if appeal time limit expired before the said date, but appeal was filed afterwards.
“These are the practical ambiguities faced by several taxpayers considering the multifaceted tax appeal procedures and the clarifying FAQs are a welcome move,” said Manish Garg, lead, transfer pricing and litigation, AKM Global.
It has also been clarified that to be eligible for payment of lower rate of disputed amount, the declaration has to be filed on or before December 31, 2024 and not the payment before that date. The payment of the disputed amount is required to be made within 15 days of the date of receipt of certificate issued by the tax officer.
Another important clarification which was missing in the first set of FAQs and has been included now is related to the applicability of secondary adjustment under transfer pricing. It has been clarified that the secondary adjustment will be applicable in such cases unless the case pertains to Assessment Year 2016-17 or earlier years when the provisions of secondary adjustment were not in place.
“Overall, the FAQs have been issued with the aim of creating better awareness and understanding with respect to the provisions of the scheme. This will help the taxpayers to make a considered decision,” said Sachin Garg, partner, Nangia & Co LLP.
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