Context:
The second edition of the Direct Tax Vivad se Viswas scheme 2024 (VSV 2.0) will be operational soon.
Vivad Se Vishwas Scheme 2024 (VSV 2.0):
- Purpose – Reduce ongoing litigations related to income tax.
- Offers streamlined appeals process for resolving disputes between taxpayers and the Income Tax Department.
- Coverage – Appeals, writ petitions, and special leave petitions pending as of July 22, 2024.
- Forums – Includes Joint Commissioner of Income-tax (Appeals), Income Tax Appellate Tribunal (ITAT), and higher courts.
- Inclusions – Cases with objections filed before the Dispute Resolution Panel (DRP) without final assessment orders, and pending revision applications before the Commissioner.
- Exclusions – Cases involving searches, prosecutions, undisclosed foreign income, and taxpayers under specific legal restrictions or serious offenses.
- Benefits –
- Waivers – Penalties and interest waived for settlements.
- No Prosecution – Ensures no prosecution for cases resolved under the scheme.
- Cost-Effective – Provides a cost-effective mechanism for settling disputed issues, reducing the burden on taxpayers and the judicial system.
- Implementation – Effective Date on October 1, 2024123.
Direct Tax:
- A tax levied directly on individuals or entities based on their income or profits, without any intermediary.
- Characteristics:
- Payment – Paid directly by the taxpayer to the government.
- Nature – Progressive, meaning the tax burden increases with higher income or profits.
- Major Types –
- Individual Income Tax: Levied on personal income.
- Corporate Income Tax: Levied on company profits.
- Capital Gains Tax: Levied on profits from the sale of assets.
- Estate Tax: Levy on the transfer of a deceased person’s assets to their heirs
Source: The Hindu Business Line
Previous Year Question
Consider the following:
1. Demographic performance
2. Forest and ecology
3. Governance reforms
4. Stable government
5. Tax and fiscal efforts
For the horizontal tax devolution, the Fifteenth Finance Commission used how many of the above as criteria other than population area and income distance?
[UPSC Civil Services Exam – 2023 Prelims]
(a) Only two
(b) Only three
(c) Only four
(d) All five
Answer: (b)
Explanation:
Criteria for horizontal devolution (Allocation Between the States) include: Income distance, area, population (2011), demographic performance, forest and ecology, and tax and fiscal efforts.
