Vivad se Vishwas Scheme 2024 - Latest Notification

The Direct Tax Vivad Se Vishwas Scheme, 2024 (DTVSV Scheme, 2024) is a significant initiative by the Government of India aimed at resolving long-standing income tax disputes and reducing litigation. Announced in the Union Budget 2024-25 by Finance Minister Smt. Nirmala Sitharaman, this scheme offers a simplified process for taxpayers to settle disputes, ensuring timely revenue collection for the government and providing clarity for taxpayers.

This blog explores the details of the DTVSV Scheme, 2024, including its objectives, eligibility criteria, the settlement process, and its benefits. It also highlights key updates such as the deadline for reduced payments (December 31, 2024), and how the scheme provides taxpayers an opportunity to settle disputes at a lower cost if declarations are filed before January 1, 2025. 

Objective of the Scheme

The primary objectives of the DTVSV Scheme, 2024 are:

• Reduction of Pending Litigation: To expedite the resolution of income tax disputes, thereby reducing the backlog of cases in various appellate forums.
• Timely Revenue Generation: To facilitate the prompt collection of tax revenues, enhancing the government's financial resources.
• Certainty for Taxpayers: To provide taxpayers with clarity and certainty regarding their tax liabilities, reducing the time and resources spent on prolonged litigation.

Key Features of the DTVSV Scheme, 2024

1. Effective Date: The scheme became effective on October 1, 2024.

2. Eligibility Criteria: The scheme applies to appeals, writ petitions, or special leave petitions pending as of July 22, 2024. This includes cases before the Supreme Court, High Courts, Income Tax Appellate Tribunal (ITAT), Commissioner/Joint Commissioner (Appeals), and Dispute Resolution Panel (DRP).

3. Settlement Amount: The amount payable under the scheme varies based on the date of filing the declaration:

• Before December 31, 2024: Taxpayers filing declarations by this date are eligible for a reduced settlement amount.
• On or After January 1, 2025: Declarations filed after this date will incur a higher settlement amount.

4. Forms and Procedures: The scheme requires the submission of specific forms:

• Form-1: Declaration and undertaking by the declarant.
• Form-2: Certificate to be issued by the Designated Authority.
• Form-3: Intimation of payment by the declarant.
• Form-4: Order for full and final settlement of tax arrears by the Designated Authority.

5. These forms are available on the Income Tax Department's e-filing portal.

6. Ineligible Cases: The scheme does not cover cases involving serious fraud, undisclosed foreign assets, or those under search operations.

Benefits of the DTVSV Scheme, 2024

For Taxpayers:

• Reduced Tax Liability: Opportunity to settle disputes by paying a specified portion of the disputed tax, interest, and penalties.
• Certainty and Peace of Mind: Eliminates the uncertainty associated with prolonged litigation.
• Cost and Time Savings: Reduces the need for extensive legal proceedings, saving both time and resources.

For the Government:

• Timely Revenue Collection: Facilitates the prompt collection of tax revenues.
• Reduced Litigation Costs: Decreases the administrative burden and costs associated with prolonged legal battles.

Procedure to Opt for the Scheme

1. Filing Declaration: Taxpayers must file a declaration in Form-1, providing details of the disputed tax, interest, and penalties.
2. Payment of Amount: Upon acceptance of the declaration, the taxpayer is required to pay the specified amount within the stipulated time frame.
3. Issuance of Certificate: After payment, the Designated Authority issues a certificate in Form-2, confirming the settlement.
4. Final Settlement: The settlement becomes final, and no further proceedings are initiated concerning the disputed tax.

Common Queries Addressed

Q1. Can a taxpayer opt for the scheme if their appeal was disposed of after July 22, 2024?
Ans. Yes, such cases are eligible for settlement under the scheme, provided the appeal was pending as of July 22, 2024.

Q2. Are cases involving prosecution eligible for the scheme?
Ans. No, cases involving prosecution are not eligible for settlement under the DTVSV Scheme, 2024.

Q3. What if the taxpayer has already paid a portion of the disputed tax?
Ans. The amount already paid will be adjusted against the total payable under the scheme.

Conclusion

The Direct Tax Vivad Se Vishwas Scheme, 2024 (DTVSV Scheme, 2024) is a crucial step in resolving long-pending tax disputes, providing both taxpayers and the government an opportunity to streamline the dispute resolution process. By offering a simplified approach to settle disputes, the scheme aims to significantly reduce litigation and offer certainty to taxpayers about their tax liabilities.

Here are the key points to remember:

1. Eligibility: The scheme applies to pending disputes as of July 22, 2024, covering appeals before various appellate forums like the Supreme Court, High Courts, and ITAT.
2. Settlement Process: Taxpayers must submit a declaration in Form-1, pay the disputed amount, and receive a settlement certificate from the Designated Authority.
3. Deadline for Reduced Payment: Taxpayers filing declarations before December 31, 2024, can benefit from a lower settlement amount.
4. Ineligible Cases: The scheme excludes cases related to serious fraud, undisclosed foreign assets, and prosecution-related matters.
5. Forms to be Filed: Taxpayers need to file several forms (Form-1 to Form-4) as part of the settlement process, available on the Income Tax Department's portal.

In conclusion, the Vivad Se Vishwas Scheme, 2024 provides a unique opportunity for taxpayers to resolve their disputes quickly and efficiently, ensuring a smoother relationship with tax authorities. Taxpayers looking to benefit from this scheme should evaluate their eligibility and take action promptly to settle any outstanding disputes.