Daily Current Affairs : 2-September-2024

The Central Board of Direct Taxes (CBDT) has added the e-Dispute Resolution Scheme (e-DRS) 2022 to help lessen tax-associated litigation and provide quick remedy to eligible taxpayers. This initiative targets to make the process of resolving disputes greater on hand and efficient through an online platform. The scheme is designed to help taxpayers in resolving problems with the tax department without having to go through lengthy legal battles.

Eligibility for e-DRS

The e-Dispute Resolution Scheme is available to taxpayers who meet certain conditions. These include:

  • Dispute Involving Specified Orders: The scheme applies only to disputes that involve specific types of orders.
  • Aggregate Variation Under ₹10 Lakh: The total variation in tax assessment or demand must not exceed ₹10 lakh.
  • Returned Income Below ₹50 Lakh: The taxpayer’s declared income should be under ₹50 lakh.
  • Exclusions: Cases related to searches or certain specific agreements are not eligible for this scheme.

This targeted eligibility ensures that the scheme is available to a large number of taxpayers while excluding more complex cases that may require more extensive legal procedures.

Procedures of the Dispute Resolution Committee (DRC)

Once an eligible taxpayer files an application, the Dispute Resolution Committee (DRC) will review the case. The key features of the DRC’s role are:

  • Modification of Orders: The DRC has the authority to modify tax orders if they find the initial decision to be incorrect.
  • Penalty Reduction or Waiver: The committee can also reduce or waive penalties imposed on the taxpayer.
  • Timely Decision: The DRC must issue its decision within six months from the end of the month in which the application is admitted.

These provisions help ensure that disputes are resolved quickly and fairly.

Filing Process

To file for dispute resolution under the e-DRS, taxpayers must follow these steps:

  • Online Application: Applications must be submitted electronically through the Income Tax Department’s portal.
  • Form No. 34BC: The application must be made using Form No. 34BC, which is available on the portal for taxpayers to fill out.

This online filing system ensures a streamlined and paperless process for taxpayers.

Important Points:

  • Introduction of e-DRS 2022: Aimed at reducing tax litigation and providing a quicker resolution for eligible taxpayers.
  • Eligibility Criteria:
    • Disputes involving specified orders.
    • Aggregate variation in tax assessment not exceeding ₹10 lakh.
    • Returned income of the taxpayer must be below ₹50 lakh.
    • Excludes cases related to searches or certain agreements.
  • Dispute Resolution Committee (DRC) Procedures:
    • DRC can modify orders, reduce or waive penalties.
    • DRC must issue a decision within six months from the application date.
  • Filing Process:
    • Applications are submitted online through the Income Tax Department portal.
    • Use Form No. 34BC for filing.
  • Benefits:
    • Simplifies the process with electronic filing.
    • Ensures quicker and fair resolution of disputes.
    • Helps ease the litigation burden on both taxpayers and tax authorities.

Why In News

The Central Board of Direct Taxes (CBDT) has introduced the e-Dispute Resolution Scheme (e-DRS) 2022 to reduce litigation and provide relief to eligible taxpayers, making the tax dispute resolution process faster, more accessible, and less burdensome. This initiative aims to streamline the resolution of tax disputes through a user-friendly online platform, offering taxpayers an efficient alternative to lengthy legal battles.

MCQs about The e-Dispute Resolution Scheme (e-DRS) 2022

  1. What is the primary objective of the e-Dispute Resolution Scheme (e-DRS) 2022 introduced by the CBDT?
    A. To increase tax assessments
    B. To reduce tax-related litigation
    C. To introduce new tax rules
    D. To collect more taxes from high-income earners
    Correct Answer: B. To reduce tax-related litigation
    Explanation: The main goal of the e-DRS 2022 is to reduce litigation in tax-related matters and provide relief to eligible taxpayers by offering a quicker and more efficient method of resolving disputes.
  2. Which of the following conditions must a taxpayer meet to be eligible for the e-DRS?
    A. The aggregate variation in tax assessment must exceed ₹20 lakh
    B. The taxpayer’s income should be above ₹50 lakh
    C. The dispute must involve specified orders and the returned income should be under ₹50 lakh
    D. The taxpayer must be a business owner
    Correct Answer: C. The dispute must involve specified orders and the returned income should be under ₹50 lakh
    Explanation: The e-DRS scheme is available to taxpayers whose disputes involve specified orders, where the aggregate variation in tax assessment does not exceed ₹10 lakh, and their declared income is below ₹50 lakh.
  3. What is the maximum time within which the Dispute Resolution Committee (DRC) must issue its decision after receiving an application?
    A. 12 months
    B. 9 months
    C. 6 months
    D. 3 months
    Correct Answer: C. 6 months
    Explanation: According to the e-DRS, the Dispute Resolution Committee (DRC) must issue its decision within 6 months from the end of the month in which the application is accepted.
  4. What is the required form for filing an application under the e-DRS?
    A. Form No. 34B
    B. Form No. 34BC
    C. Form No. 35A
    D. Form No. 36D
    Correct Answer: B. Form No. 34BC
    Explanation: Taxpayers must submit their dispute resolution application using Form No. 34BC, which is available on the Income Tax Department’s portal for electronic submission.

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