The Union Budget 2021 has proposed to set up a Dispute Resolution Committee for small taxpayers. The provision is aimed to help people with a taxable income up to Rs. 50 lakh and disputed income up to Rs. 10 lakhs. Moreover, the committee is stated to be faceless in order to ensure efficiency, transparency and accountability.
The Government had last year introduced the Direct Tax Vivad se Vishwas Scheme to reduce the pending income tax litigations at various appellate forums and timely collection of the revenue. It also aims to help taxpayers end their tax disputes with the department by paying disputed tax and get waiver from payment of interest and penalty.
In today’s budget speech Finance Minister Nirmala Sitharaman acknowledged that the response from the taxpayers towards the scheme has been the best ever. “…over 1 lakh ten thousand taxpayers have already opted to settle tax disputes of over `85,000 crores under this Scheme.” said the Minister.
The Financial Bill proposes to insert a new Chapter XIX-AA to the Income Tax Act. Section 245MA provides for the establishment of one or more Dispute Resolution Committees by the Central Government. The Dispute Resolution Committee is empowered to reduce or waive any penalty imposable under the Income Tax Act or grant immunity from prosecution.
The new provision will come to effect from 1st April 2021.
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