Government to make changes in income tax law to lessen the disputes

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The government is likely to consider legal and procedural changes to ensure that tax disputes are kept to the minimum and cases don’t accumulate. This follows more than a third of the total 510,000 income tax dispute pending for many years having been resolved through the Vivad se Viswas Scheme(VSVS).

A compendium of dispute cases is being created to understand tax appeal patterns and see if there has been an abuse of certain provisions. The income tax department’s technical units are looking at current disputes while the review unit is examining cases to see if they should be appealed. The government has progressively raised the monetary threshold for appeals by the tax department at different levels of resolution to cut down on disputes, among other measures. The thrust is on an enabling environment to ensure that assessments are framed fairly and objectively. The Vivaad Se Vishwas Scheme was rolled out last year to provide an opportunity to taxpayers to settle past disputes. Of the total 510,000 pending tax disputes, as of January 2020, the government received declarations for 148,000 cases under the scheme while forms of payment have been filed for 133,000 cases. A large majority of the declarations and forms has been from the private sector.

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