The Central Government is taking significant steps to speed up the resolution of tax disputes, especially those related to income tax. Starting from October 1, a new initiative called the Direct Tax Dispute Resolution Scheme 2.0 will be launched. This scheme aims to address the backlog of pending tax disputes, which has been a growing concern. The Union Finance Minister recently made this announcement during the budget presentation, highlighting the government’s commitment to improving the efficiency of tax administration.
Background of Previous Schemes
To understand the context of this new scheme, it’s important to look back at the previous efforts. The first version of this initiative, known as the Vivad Se Vishwas 1.0 scheme, was introduced in 2020. It successfully helped over one lakh taxpayers resolve their pending issues. Participants in the first phase had their disputes settled, leading to the closure of their tax files. The government was able to collect approximately Rs 75 thousand crore through this scheme, which showcases its effectiveness in addressing tax disputes and generating revenue.
Current Scenario and Taxpayer Needs
Currently, there are more than Rs 35 lakh crore worth of direct tax demands pending at various levels. Many taxpayers are looking for ways to resolve their cases with minimal penalties or other lenient provisions. The new Direct Tax Dispute Resolution Scheme 2.0 is expected to provide them with the opportunity to close their cases efficiently. By streamlining the dispute resolution process, the government hopes to alleviate the burden on taxpayers while also improving overall compliance with tax regulations.
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Tax Dispute Resolution Scheme 2.0
The Central Government of India is launching the Direct Tax Dispute Resolution Scheme 2.0 on October 1 to expedite the resolution of pending income tax disputes. Announced by Union Finance Minister Nirmala Sitharaman, this initiative follows the Vivad Se Vishwas scheme introduced in 2020, which successfully resolved over one lakh cases, generating approximately Rs 75,000 crore in direct tax. Currently, disputes exceeding Rs 35 lakh crore remain pending, with many taxpayers seeking favorable resolutions.
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