Over the past few years, Indian Government has undertaken several initiatives to reduce litigation. These includes the following:
» Circulars issued by the Central Board of Direct Taxes (CBDT) clarifying tax position on several controversial tax issues.
» Circulars issued on topics at nascent stage in the form of “frequently asked questions” for clarifying tax implications.
» Understanding Stakeholder views are sought via draft Circulars on certain topics prior to issuance of final Circulars.
» Increasing monetary threshold (i.e tax effect) for the tax authorities to prefer an appeal to the next appellate authority.