CBDT Launches New e-DRS Scheme for Simplified Tax Dispute Resolution

The Central Board of Direct Taxes (CBDT) has introduced the Dispute Resolution Scheme (e-DRS), 2022, a significant step toward streamlining and simplifying the process of resolving income tax disputes. This initiative, introduced under section 245MA of the Income-tax Act, 1961, is designed to offer taxpayers a more efficient, electronic platform for addressing and resolving their disputes through Dispute Resolution Committees (DRCs).

Key Features of the e-DRS Scheme

Eligibility Criteria

  • Taxpayers can apply for dispute resolution under this scheme if certain conditions are met. Specifically, the disputed amount must not exceed Rs. 10 lakh, and the taxpayer’s income for the relevant year should be below Rs. 50 lakh.
  • The scheme excludes disputes involving information obtained from searches or international agreements.

Application Process

  • Taxpayers interested in utilizing this scheme can apply electronically via Form No. 34BC, available on the Income Tax Department’s e-filing portal.
  • Applications should be submitted within one month of receiving the relevant order. If an appeal is already pending, applications can be filed until September 30, 2024.

Role of the Dispute Resolution Committees (DRCs):

  • The DRCs, established across 18 regions in India, have the authority to modify orders, reduce penalties, and even waive prosecution.
  • These committees are mandated to deliver their decisions within six months of receiving an application.

How to Apply for the e-DRS Scheme

  • Login:

  • Navigate to the Form:

    • Go to the Dashboard, select e-File, then Income Tax Forms, and choose File Income Tax Forms.
    • Select ‘Dispute Resolution Committee in Certain Cases (Form 34BC)’ from the options.

  • Complete the Form:

    • Fill out Form No. 34BC, review the information, and e-verify the form using Aadhaar OTP, EVC, or DSC

Read More: Exploring Section 44AB of the Income Tax Act: Threshold Limits and Applicability

The e-DRS scheme is a crucial development in making tax compliance more taxpayer-friendly by reducing litigation and offering a faster, cost-effective resolution process. This initiative is part of the broader government effort to enhance the ease of doing business in India by simplifying tax procedures and improving accessibility for taxpayers.

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