The government can bring another tax amnesty proposal on the lines of Vivad se Vishwas scheme in Budget 2023 to help reduce litigation burden and aid revenue collection in the next fiscal.
Taxpayers who are embroiled in litigations and appeals could be asked to pay the disputed amount along with 10-20% penalty to settle the cases, reports said.
It may propose amnesty with a penalty of 10 percent on the disputed tax amount if the matter is pending with the Commissioner of Income-Tax (Appeals).
For matters pending before Income Tax Appellate Tribunal (ITAT), an amnesty with a penalty of 20 percent on the disputed tax amount is being considered, the sources said.
The scheme is important as it will help the government in raising revenue at a time when nominal GDP is expected to come down and hit tax collection. Tax revenue is expected to taper in the next fiscal compared to the stellar collections in this fiscal.
Also read: What could change for taxpayers and investors next month
The government had accumulated revenue of over Rs 53,000 crore from the earlier Vivad se Vishwas scheme.
Not just for direct taxes, a similar scheme could also be announced for disputes associated with customs in the upcoming Union Budget.
The CBIC's amnesty scheme may cover disputes over classification, valuation and exemptions, a CNBC TV18 report quoted sources as saying.
The government is expected to meet its fiscal deficit target in the current fiscal on the back of buoyant tax collections.
The net direct tax collection grew 19.55 per cent to Rs 12.31 lakh crore till January 10. This is 86.68 per cent of the Budget estimates for current fiscal year.
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