In 2022, the Government of India introduced the E-Dispute Resolution Scheme to modernize and streamline the functioning of the taxation system. Section 245MA of the Income-tax Act, 1961, established this scheme to efficiently, inexpensively, and electronically settle minor tax matters. It forms part of India’s move to make tax administration faceless, so as to decrease harassment, improve transparency and make it simpler to do business.
Concept of the E-Dispute Resolution Scheme
This digital service enables eligible taxpayers to resolve disagreements with the income tax department without the need to attend hearings or handle physical documents. You complete the entire process online using the Income Tax Department’s e-filing website. Not all taxpayers and disputes are covered by this scheme, and there is a monetary limit for those that are.
Objectives of the E-Dispute Resolution Scheme
Its main purpose is to take minor disputes out of the appellate system at an initial stage. Its purpose is to ensure taxpayers feel more confident in the process by resolving disputes in a simple and supportive way. It also wants to stop people from talking directly in the appeal process to reduce corruption, increase the effectiveness of the administration and help small taxpayers get treated fairly.
Structure and Jurisdiction of the Scheme
The Dispute Resolution Committees (DRCs) are introduced by the scheme and are formed by the Central Board of Direct Taxes (CBDT) through the appointment of professionals experienced in tax matters. They can review submitted papers, ask for more information and resolve arguments by giving legally documented orders. Digital communication is the sole way for DRCs to provide their services, so paperwork and appearance in person are not needed.
Who Can Avail the Scheme?
The E-Dispute Scheme is designed to assist individuals and Hindu Undivided Families (HUFs) with modest incomes and minor tax disputes. The scheme is designed for taxpayers with a remuneration of less than ₹50 lakh. Additionally, the case can only be handled under small claims if the contested amount does not exceed ₹10 lakh. No significant charges under tax or criminal law for money laundering, benami transactions or wilful tax evasion should be present against the taxpayer.
The Process to Apply under the Scheme
Application under this scheme can be completed easily online. Follow the outlined instructions below:
Step 1: Log in to the official website for Income Tax.
Go to the Income Tax e-Filing Portal, use your ID (PAN) and password, then provide the OTP.
Step 2: Go to the E-Dispute Resolution Tab.
From the dashboard, go to the ‘e-Proceedings’ or ‘e-Dispute Resolution’ tab.
Step 3: Review and choose the dispute that is eligible for you.
As soon as your case is under the scheme, it will be automatically added. Pick the dispute you want to address and start the process.
Step 4: Upload the Necessary Documents
Upload documents including:
- Copy of the pending appeal
- Tax calculation sheet
- PAN card
- Evidence of how much is earned.
- Other types of supporting evidence.
Step 5: Complete the Declaration and Pay
Make necessary declarations and, if required, pay any pre-deposit or partial disputed amount.
Step 6: Keep an eye on your application status.
Alerts and updates will be sent to you using the portal. You will receive the final resolution document within the time period indicated when the case is completed.
Advantages of the E-Dispute Resolution Scheme
This system helps taxpayers save both time and money needed to file their taxes. You do not need to hire a lawyer or visit any tax offices. The entire process takes place online, making it very easy for the applicant. All parts of the process are easy to follow because they are all saved and checked on computers. The scheme reduces the workload of appellate authorities and helps both taxpayers and the administration resolve issues more efficiently. It also relieves the anxiety and fear that small taxpayers may feel when they must deal with the tax department.
Legal Framework Supporting the Scheme
The main legal basis of this scheme is Section 245MA of the Income Tax Act, 1961. The CBDT is authorized to establish and administer a system for resolving disputes. It supports the Faceless Assessment Scheme and the Faceless Appeal Scheme, aiming to establish a digital and faceless tax ecosystem in India. The process acts as part of reducing human decision-making and using automated systems in tax dispute handling.
Difficulties and Obstacles
Even though the E-Dispute Resolution Scheme has many strengths, it does have some restrictions. This covers disputes of up to ₹10 lakh, which means major and big taxpayers are not covered. It does not cover companies, foreign groups or non-residents. People who have committed serious offences or are being investigated can’t apply to this program. Many small taxpayers are still left out, because they might be unfamiliar with online filing or don’t have proper internet access. Sometimes, technology problems on the portal mean things cannot run smoothly as planned.
Impact on the Taxpayer Community
E-Dispute Resolution marks a major change in tax handling policies in India. It supports the interests of taxpayers by reducing the time small disputes spend in the courts. Using the scheme helps regain taxpayers’ confidence and establishes that simplifying tax compliance is a government priority. People on a salary, small traders and professionals find the system helpful since contesting a tax decision can be unnerving if it leads to legal action.
Conclusion
The E-Dispute Resolution Scheme plays a major role in helping India achieve a digital and trustworthy tax system. The presence of the scheme helps address small disputes promptly, inexpensively, and anonymously, which boosts business and encourages confidence within the taxpayer community. It is an indication that the government cares about progress, organization and empowering taxpayers. Improvements in digital literacy and infrastructure in India are likely to grow the scheme’s reach and influence, making it simpler and less daunting for lots of people to pay taxes.
Related Services
Frequently Asked Questions
1. What is the E-Dispute Resolution Scheme?
It is available online for comparing tax settlements without people having to attend in person.
2. What groups of people can be eligible for the scheme?
Individuals, in addition to HUFs, who have an income of up to ₹50 lakh and a disputed tax value not exceeding ₹10 lakh.
3. What is the purpose of the scheme?
It encourages a few disputes to be resolved in court, saving both time and cost and helps with tax transparency.
4. Where can I apply?
Applications for the settlement can be made directly on the official Income Tax e-filing website: www.incometax.gov.in.
