The Central Board of Direct Taxes (CBDT) clarified the calculation procedures of interest in the case of Disputed Tax. According to the amendment in the Direct Tax Vivad se Vishwas Bill, 2020 Know about the tax dispute settlement scheme (Vivad se Vishwas Bill) under the IT act. Under this scheme, taxpayers can settle all disputes before the end of 31st March 2020. Read More introduced by the Finance Minister of India, Mrs Nirmala Sitharaman, on 5th February 2020, a system for the settlement of disputes of pending tax liabilities related to Direct and Corporation Tax.
The CBDT said that the amount paid by the appellant will be included in the settlement and will be liable for a refund if he pays more than the amount of interest liable under Section 244A of Income Tax Act.
The assessees will be paying an amount of INR 31,000 at the time of filing return in the non-search case as a tax on income including surcharge and cess at INR 30,000 and interest of INR 1,000 under section 234B.
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The amount of disputed tax and its interest during an assessment will be INR 10,000 (including surcharge and cess) and INR 6,000 respectively and penalty will be initiated separately.
The interest to be paid under Section 220 of the Income Tax Act will be calculated later if the assessees has paid an amount of INR 14,000 during the appeal.
The declaration filed by an assessees is accepted and certified by the designated authority and an amount of INR 10,000 is paid by the assessees as the disputed tax on or before March 31, 2020.
The assessees will be receiving a total of INR 4,000 because he has already paid INR 10,000 as the disputed tax. He will be charged interest under Section 244A later on separately and the under Section 220 will be waived.