Direct Tax Dispute Resolution Scheme

2019 ias preliminary exam test series

Litigation is a scourge for a tax friendly regime. In order to reduce the pending litigation, the Direct Tax Dispute Resolution Scheme, 2016 (the Scheme) has come into force from 1st June, 2016 and can be availed up to 31st December, 2016.

The Scheme is available to the cases pending with the first appellate authority [i.e. CIT (A)] as on 29th February, 2016, subject to certain conditions.

It also extends to the cases pending litigation owing to retrospective amendment at different levels.

Under the Scheme, if the amount of disputed tax is

-Up to Rs.10 lakh, complete waiver from levy of penalty and from initiation of prosecution is provided on payment of assessed tax along with the interest.

-More than Rs.10 lakh, the declarant is required to pay only 25% of the minimum penalty leviable along with the due tax and interest.

In respect of penalty appeals, the declarant shall get waiver of the 75% of the penalty levied and immunity from prosecution. In respect of specified tax, the declarant gets complete waiver of/immunity from levy of penalty and immunity from prosecution.

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