New Delhi: A new amnesty scheme for the resolution of legacy disputes in income tax is in the works which the cash-starved government expects will mop up at least Rs 2 lakh crore. The new scheme could be unveiled in the Union Budget on Saturday as the government looks for ways and means to shore up dwindling revenue numbers.
This amnesty scheme could mirror the Sabka Vishwas scheme which was targeted at customs and excise dispute resolution amnesty scheme in which the government has mopped up at least Rs 38,000 crore. The new scheme will be for legacy disputes in corporate and personal income tax and a huge amount of over Rs 5 lakh crore is stuck in these disputes.
The Modi government expects corporates and individuals to come forward and avail of this scheme which will give them at least Rs 2 lakh crore, highly placed sources said.
The ongoing pending amount stuck in tax disputes is an issue that has been flagged by the government. The corporate and individuals prefer to go to court in a tax dispute which then stretches on for a long period of time, thereby endangering tax collection targets.
Following the achievement of the Rs 35,000 crore target in the Sabka Vishwas scheme, the Finance Ministry may feel emboldened to roll out a similar framework for income tax disputes where the stakes are higher.
The Finance Ministry received around 1.89 lakh applications under the Sabka Vishwas (Legacy Dispute Resolution Scheme) 2019, which kicked off in September and concluded on January 15.
Finance Minister Nirmala Sitharaman had unveiled the scheme in the budget for 2019-20, with an aim to assist taxpayers in clearing the baggage of disputes under legacy taxes (service tax and central excise), which are subsumed in the goods and services tax (GST).