There’s now a faster way to resolve tax disputes. But it has a huge red flag.

livemint.com:

₹50 lakhto resolve their tax disputes online in less than six months and even get any potential penalty or prosecution waived. The new scheme is meant to be faster and easier than filing an appeal with the Commissioner of Income Tax (Appeals) – CIT(A) – but one particular condition makes it the less attractive option and begs the question: is this just another toothless provision from the tax department? Until now, when a taxpayer received an assessment order demanding unpaid tax, interest or penalties on their additional income, they could file an appeal and make their case to avoid paying the penalty, if any.

If they had a genuine case and documents to prove it, they could even contest the tax demand. The new e-DRS system has been touted as a quicker alternative to this.

Mayank Mohanka, founder, TaxAaram India, and a partner at SM Mohanka & Associates said, “The appeals process is also online and faceless, but takes longer. When an application is admitted under e-DRS, the committee has six months from the end of that month to pass its order.

CIT(A), on the other hand, has a year from the end of the financial year in which the appeal is made to pass an order." Also read | Tax overload: India’s middle class is hurting because of inequitable taxation Apart from the ₹50 lakh income cap, the other condition for using e-DRS is that the aggregate amount of variation should be less than ₹10 lakh. ‘Aggregate amount of variation’ refers to the total addition/disallowance by the income tax office that results in higher income and therefore a higher tax liability, said Prakash Hegde, a chartered accountant and principal consultant of direct taxation at Acer Tax & Corporate Services LLP.