The Income Tax Department on Wednesday said taxpayers making declarations under direct tax dispute resolution scheme 'Vivad Se Vishwas' will have time till March 31 to make payment. The Central Board of Direct Taxes (CBDT) issued a clarification in respect of the scheme stating that the earlier requirement of making payment by the taxpayer within 15 days of receiving declaration certificate from designated authority will not apply. It said this has been done in order to mitigate the undue hardship. "It is hereby clarified that where a declarant files a declaration under Vivad se Vishwas on or before 31st December, 2020, the designated authority, while issuing the certificate under sub-section (I) of section 5 of Vivad se Vishwas, shall allow the declarant to make payment without additional amount on or before 31st March, 2021," CBDT said.
The government on Tuesday extended for the third time the deadline for making payment under the scheme by three months to March 31, 2021. However, declarations are required to be filed by December 31, 2020.
Nangia Andersen LLP Partner Sandeep Jhunjhunwala said this clarification comes out as a shot-term breather for taxpayers with liquidity crunch in the economy suffering the after-effects of the lockdown on account of the pandemic. "Now, these taxpayers will not be penalised for delay in payment after the receipt of certificate but on or before March 31, 2021 as the condition for payment within 15 days of receipt of such certificate seems to have lost its significance, he said.
Jhunjhunwala said since the payment interval after filing the declaration is extended for three months, there might be a possibility of additional taxpayers willing to file the declaration by the coming due date, December 31, 2020. The Direct Tax Vivad se Vishwas Act was enacted on March 17, 2020 to settle direct tax disputes locked up in various appellate forum.
In order to provide more time to taxpayers to settle disputes, earlier the date for filing declaration and making payment without additional amount under the scheme was extended from March 31, 2020 to June 30, 2020. Later, this date was extended toDecember 31. Therefore, earlier both the declaration and the payment without additional amount under the scheme were required to be made by December 31.
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