Direct Tax Dispute Resolution Scheme

Ministry/Department :  Ministry of Finance
  • The scheme was announced in the 2016-17 Budget and came into force on June 1, 2016.
  • It provides for waiving interest and penalties if the principal amount involved in retrospective tax cases is paid.
  • It aims at releasing about Rs. 5.16 lakh crore, which is locked in about 2.6 lakh pending direct tax cases.
  • Under it, a disputed tax amount of up to Rs 10 lakh and the penalty will be forgone.
  • However, in cases where the disputed tax amount is above Rs 10 lakh, a penalty of 25% will be levied.
  • It waives off the interest and penalty for retrospective tax cases only if the company in question withdraws all appeals against the government at all judicial forums.
  • Through the scheme, the government hopes to settle major retrospective tax cases facing Cairn Energy of UK and Vodafone Group.

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