The Direct Tax Vivad Se Vishwas Act, 2020

In Union Budget 2020, the Ministry of Finance has made some important announcements related to the resolution of the dispute under Direct tax laws. Now, in the last week of March 2020, the relevant Act “Direct Tax -Vivad se Vishwas Act, 2020” is notified with the President assent.

Under this Act, all disputed direct tax arrears pending at various appellate stages can be settled at concessional rate and defined benefit by waiving of interest and penalties on disputed amounts has been offered.

In lights of this circulars and amendment, for sake of easy and quick understanding of various important provisions and implication regarding the Act, we have made FAQ analysis into two parts namely:

• Applicability & Compliance
• Evaluation & Eligibility

We have also enclosed a few practical Illustrations to understand the provisions of the Act in a lucid manner.

InCorp India’s Analysis/Views

The Act is indeed a welcome move aimed at settling direct tax disputes/litigation. Certainly, this would help in reducing pending litigation and taxpayer can focus their time, efforts and resources on their businesses rather than fighting long tax disputes. It also provides a one-time opportunity to settle all the past disputes which may facilitate ease of doing business and peace of mind. Making Declaration does not tantamount to conceding tax position.

The Act deserves evaluation and requires considerations that are beyond the merits of the case. Having regard to the timelines, the taxpayer should complete its evaluation. Any issue which requires clarity for decision making should be proactively discussed with the Tax Authorities. We have penned some of our firsthand experience with our clientele which may be useful for your own evaluation. 

How can Incorp India help you?

At InCorp India, we are committed to delivering quality in assurance, tax and advisory services. Our dedicated team of tax experts can help you solve the above issues despite “working from home” (offline) and provide the ease for filing the required compliances. We can assist you not only in terms of compliance but also to evaluate the eligibility of pending case proceedings for a one-time settlement under this Act by evaluating cost-benefit analysis. We have issued various advisory to entities looking to opt for the Act based on our experience.