Settle Tax Dispute by 31st March 2020, Get discount on penalty

As per the bill, the scheme is applicable to: the appeals filed by taxpayers or the Government, which are pending with the Commissioner (Appeals), Income tax Appellate Tribunal, High Court or Supreme Court as on the 31st day of January, 2020 irrespective of whether tax demand in such cases is pending or has been paid; The pending appeal may be against disputed tax, interest or penalty in relation to an assessment or reassessment order or against disputed interest, disputed fees where there is no disputed tax.

According to the bill containing scheme details, the designated authority, within a period of 15 days from the date of receipt of the declaration will determine the amount payable by the declarant (taxpayer) in accordance with the provisions of this Act (the scheme) and grant a certificate to the declarant containing particulars of the tax arrears and the amount payable after such determination, in such form as may be prescribed.

The taxpayer would be required to pay the amount determined by the designated authority  within 15 days of the date of receipt of the certificate and intimate the details of such payment to the designated authority in the prescribed form and there upon the designated authority shall pass an order stating that, the declarant has paid the amount.

The scheme details mention that once the taxpayer avails to resolve the dispute with the tax authority under this scheme then the amount payable, shall be considered final and such cases will not be reopened in any other proceeding under the Income-tax Act. The designated authority shall not institute any proceeding in respect of an offence; or impose or levy any penalty; or charge any interest under the Income-tax Act in respect of tax arrears.

Scheme may not be applicable in following Cases:

  1. Relating to an assessment year in respect of which an assessment has been made under section 153A or section 153C of the Income-tax Act, if it relates to any tax arrear;
  2. Relating to an assessment year in respect of which prosecution has been instituted on or before the date of filing of declaration;
  3. Relating to an appeal before the Commissioner (Appeals) in respect of which notice of enhancement under section 251 of the Income-tax Act has been issued on or before the specified date;
  4. To any person in respect of whom an order of detention has been made under the provisions of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 on or before the filing of declaration.
  5. Relating to any undisclosed income from a source located outside India or undisclosed asset located outside India;

6. Relating to an assessment or reassessment made on the basis of information received under an agreement referred to in section 90 or section 90A of the Income-tax Act, if it relates to any tax arrear;

Budget 2020, Highlights & Important points to consider

Budget 2020-2021, presented today by our honourable finance minister, Nirmala sitharaman. Here , we came to administer a new tax regime in which a normal taxpayer who is not taking any tax deduction till now, get benefitted with lower tax slabs.

New tax slabs has eliminated tax upto the income of five lakhs in which middle and lower middle group will get benefitted more.

Taxes from 5 - 7.5 lakhs reduced from existing 20% to 10% , 7.5 - 10 lakhs reduced from current 20%  to 15% , 10 - 12.5 laks reduced from current 30% to 20% , 12.5 - 15 lakhs from current 30% to 25%.Tax Slabs above 15 lakhs has kept at previous rates of 30 %.

New tax regime came with an option to choose from current slab rates or previous slab rates in which differerence is of deduction benefits, which says, If you choose to get deduction of 80c, 80 D  10,10D etc. then you have to opt the previuos tax rates in which old slab will prevail . In other scenario, if we choose not to invest in tax saving instruments specifically for tax rebate, then new tax slab rate is made available for you.

This budget in its clear picture show liquidity measures in the hands of taxpayers who previousy invests in specific options just for the sake of tax benefits instead of other options or taking it as a liquid. But now there is an option in which just pay a nominal amount as tax to the government and invest or use your money as you wish to use or invest.

Budget 2020,focussed long term growth of the economy. Finance minister sought a growth rate of 10% in coming financial year with a fiscal deficit of 3.8 % instead of previously sought rate of 3.3%. This announcement made foreign investment more attractive by removing dividend distribution tax for the companies which is now be taxed in the hands of investors. There is not any relaxation for LTT or STT.

Now, the investor or an individual has to make separate calculation or computation based on their income and choose from the tax  rates to go with.