Direct Tax Dispute Resolution Scheme Current Affairs
The Central Board of Direct Taxes (CBDT) has extended the last date for availing the Direct Tax Dispute Resolution Scheme to January 31, 2017 from the earlier deadline of December 31, 2016.
This extension aims to give companies one more month to accept its offer to settle retro tax disputes with Government. It comes against the backdrop of tepid response from companies to the scheme.
About Direct Tax Dispute Resolution Scheme
- The scheme was announced by Finance Minister Arun Jaitley in the 2016-17 Budget and came into force on June 1, 2016.
- It provides for waiving interest and penalties if the principal amount involved in retrospective tax cases is paid. It aims at releasing about Rs. 5.16 lakh crore, which is locked in about 2.6 lakh pending direct tax cases.
- Under it, a disputed tax amount of up to Rs 10 lakh and the penalty will be forgone. However, in cases where the disputed tax amount is above Rs 10 lakh, a penalty of 25% will be levied.
- It waives of the interest and penalty for retrospective tax cases only if the company in question withdraws all appeals against the government at all judicial forums.
- Through the scheme, the government hopes to settle major retrospective tax cases facing Cairn Energy of UK and Vodafone Group. It also expects a third of the other tax disputes to be settled.