The government has once again extended the deadline for making payment under the direct tax dispute settlement scheme ‘Vivad Se Vishwas’ by two months till June 30, 2021 to provide relief to the taxpayers facing hardships amid the pandemic. This is the fourth time that the deadline is being extended by the Ministry of Finance, since the launch of the scheme. The deadline was extended for the first time from March 31, 2020, to June 30, 2020, followed by December 31, 2020, and then again till March 31, 2021.
What is Vivad Se Vishwas scheme?
- The ‘Vivad Se Vishwas’ scheme was announced in the Union Budget 2020, as per which a taxpayer would be required to pay only the amount of the disputed taxes and will get a complete waiver of interest and penalty provided he pays by 31st March 2020.
- Those who avail of this scheme after 31st March 2020 will have to pay a 10% additional penalty and interest amount.
- The scheme provides for settlement of disputed tax, interest, penalty or fees in relation to an assessment or reassessment order on payment of 100 per cent of the disputed tax and 25 per cent of the disputed penalty or interest or fee.
- The taxpayer is granted immunity from levy of interest, penalty and institution of any proceeding for prosecution for any offence under the Income-tax Act in respect of matters covered in the declaration.