Direct Tax Vivad Se Vishwas Act, 2020

The Direct Tax Vivad se Vishwas (from dispute to trust) Act, 2020 received assent of The President on the 17th March, 2020. It aims to resolve direct tax related disputes in a speedy manner.

Salient Features

• Wide Coverage: It has provisions to cover tax disputes pending at the level of Commissioner (appeals), Income Tax Appellate Tribunals (ITAT), High Courts and the Supreme Court.
• Resolution Mechanism: Under the proposed scheme, taxpayers willing to settle disputes shall be allowed a complete waiver of interest and penalty if they pay the entire amount of tax in dispute.
• Immunity to Appellant: Once a dispute is resolved, the designated authority cannot levy interest or penalty in relation to that dispute. Further, no appellate forum can make a decision in relation to the matter of dispute once it is resolved.
• Revival of Disputes: If particulars filed are found to be false, declaration filed by an appellant will become invalid and all proceedings and claims withdrawn based on the declaration will be deemed to have been revived.
• Disputes Not Covered: The proposed mechanism will not cover certain disputes. These include disputes:
  • where prosecution has been initiated before the declaration is filed,
  • which involve persons who have been convicted or are being prosecuted for offences under certain laws (such as the Indian Penal Code), or for enforcement of civil liabilities, and
  • involving undisclosed foreign income or assets.

As of 9 August 2021, Rs 99,756 crore disputed tax amount has been settled under the Act.