e-DRS

 

The Central Board of Direct Taxes (CBDT) recently launched the e-Dispute Resolution Scheme (e-DRS) to make the resolution of income tax dispute simpler, more effective and more productive. This online platform allows taxpayers to submit application to dispute resolution committees (DRCs) across India. It is an alternative to the traditional legal proceeding that already exists. Eighteen DRCs have been set up to accept applications. DRC can modify orders, reduce or wave penalties, and grant immunity from prosecution.

Who is eligible?

Eligibility is limited to those with total income of up to Rs 50 lakh and a tax variation not exceeding Rs 10 lakh for the relevant assessment year. A taxpayer can apply for e-DRS for a specified order including draft orders, intimations, certain assessments, orders increasing assessment or reducing loss, and orders related to tax deduction or collection (subject to condition) . However orders from search, survey proceedings or international agreements are excluded. Taxpayer prosecuted for specified offence under the income-tax Act, 1961, or other specified Acts are also excluded.

Faster and cost-effective

E-DSR offers a faster and more cost-effective alternative to traditional to traditional litigation the DSC is required to pass orders within six months after admitting the application. Once the DRC accepts the application, tax and interest must be paid, but penalties (up to 100 per cent for under –reporting or 200 per cent for misreporting) and prosecution can be waived.

Limited mandate

Not all disputes qualify. Complex cases may still require traditional litigation. DRC decisions are typically final and binding on taxpayers. If the proceedings are terminated or relief is denied, the decision cannot be appealed, which is the key drawback of the scheme. In such a cases the only option for the taxpayer is to challenge the DRC order through a write petition in the high court.

Essential Guide To Filing Form-34BC

Taxpayers can apply by filing Form-34BC on the income tax portal, by paying fee of Rs. 1000. Form 34bc can only be filed online through the e-filing portal. Lastly taxpayer can e-verify Form -34BC using Aadhaar OTP, electronic verification code (EVC) or Digital Signature Certificate (DSC).

Source: Business Standard.