The Budget 2024-25 proposed to hike the monetary limits for filing tax appeals.
Union finance minister Nirmala Sitharaman on Tuesday hiked monetary limits for filing tax dispute appeals in the tax tribunal, high courts and the Supreme Court to ₹60 lakh, ₹2 crore and ₹5 crore, respectively, to reduce the number of pending cases.
The government proposes to raise the monetary limits for filing appeals related to direct taxes, excise, and service tax. The new limits are ₹60 lakh for the Tax Tribunals, ₹2 crore for High Courts, and ₹5 crore for the Supreme Court. The previous limits were ₹50 lakh for the Tax Tribunals, ₹1 crore for High Courts, and ₹2 crore for the Supreme Court.
The finance minister also announced the Direct Tax Vivad Se Vishwas Scheme 2024. Initially introduced in 2020 as a dispute resolution scheme, it applies to appeals or petitions filed by taxpayers or the income tax department. Essentially, it offers to waive interest and penalties if the taxpayer agrees to pay the disputed tax amount.
She said “With a view to reduce litigation and provide certainty in international taxation, we will expand the scope of safe harbour rules and make them more attractive. We will also streamline the transfer pricing assessment procedure.”
Speaking of the government’s efforts to reduce direct tax litigation, FM Sitaraman said: “While our concerted efforts to reduce pendency of appeals at various appellate fora are beginning to show good results, it will continue to engage our highest attention.”
The finance minister also announced the deployment of additional officers from the Income Tax Department to hear appeals filed by assessees.
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