What is ‘Vivad se Vishwas’ Scheme? Is ‘Vivad se Vishwas’ Scheme Related to Income Tax?

Recently, the Vivad se Vishwas scheme is topping the search results and is considered to be an important topic for the upcoming civil services examination. There is a high chance of questions coming from Vivad se Vishwas scheme in UPSC prelims in economics Taxes and Taxation paper. In the UPSC mains examination also, aspirants might find questions from this topic as it falls under GS-III Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment paper.

In order to ace the UPSC exam, it is important to know what is Vivad se Vishwas scheme? What the Vivad se Vishwas scheme is related to? Only after knowing all these, one can make a strategy and start preparing for it.

So, let’s waste no more time and see what things aspirants must focus on this topic.

What is ‘Vivad se Vishwas’ Scheme?

Vivad se Vishwas scheme is related to tax as this programme is introduced by the government for setting tax disputes. Now the question is, what is Vivad se Vishwas scheme? In easy words, it is an amendment which was recently approved by the Union Cabinet to the ‘Direct Tax Vivad se Vishwas Bill, 2020’.

On 1st February 2020, Union Finance Minister Nirmala Sitharaman announced income tax Vivad se Vishwas scheme. To cover litigation pending in various DRTs (Debt Recovery Tribunals), this amendment was improved.

Certain search and seizure cases of recovery amount up to ₹5 crore was also part of the approved amendment. After the approval of the programme, taxpayers are allowed to settle cases which are pending before the Debt Recovery Tribunals (DRTs), Commissioner (Appeals), Income Tax Appellate Tribunals (ITATs), Supreme Court and High Court.

Key Points about Income Tax ‘Vivad se Vishwas’ Scheme

Simple and speedy resolution of pending tax disputes related to direct taxes such as corporate tax and income tax is offered in this bill.
Presently in the courts, there is 4.83 lakh pending direct tax cases worth Rs.9 lakh crore which the Government wants to recover swiftly through this income tax Vivad se Vishwas scheme.
One of the main objectives behind this bill was to address the revenue shortfall the government is witnessing. The government received lower than the budget target direct tax collection in September 2019 as one of the effects of the economic slowdown.

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