As the deadline of 31st January 2024 approaches, taxpayers under dispute with the income tax department have a final opportunity to resolve their cases through the Direct Tax Vivad Se Vishwas Scheme, 2024. This scheme, launched by the government, aims to simplify tax dispute resolution by offering a mechanism to settle disputed amounts and reduce litigation.

The Central Board of Direct Taxes (CBDT), in exercise of its powers under sub-section (2) of section 97 of the Direct Tax Vivad Se Vishwas Scheme, 2024 extended the due date for determining amount payable as per column (3) of the Table specified in section 90 of the Scheme from 31 December, 2024 to 31 January, 2025.

What is the Vivad Se Vishwas Scheme, 2024?

The Vivad Se Vishwas Scheme is part of the government’s efforts to ease compliance and clear backlogs of pending tax disputes. It allows taxpayers to settle direct tax disputes by paying a reduced amount. The scheme eliminates the uncertainty of prolonged litigation and provides relief to both taxpayers and the department.

Key highlights:

• Disputes Eligible: Appeals pending before any appellate forum, including Commissioner (Appeals), Income Tax Appellate Tribunal (ITAT), High Court, or Supreme Court, as of 31st January 2024.
• Reliefs: Pay the disputed tax amount and waive off interest and penalties.
• Reduced Payments: If appeals concern penalties or interest only, pay just 25% (if filed before the cutoff date) or 30% (if after).

How to File Under the Vivad Se Vishwas Scheme?

Here is a step-by-step guide for taxpayers to avail of the scheme:

1. Access the Online Portal

Visit the Income Tax Department’s official E-filing portal (www.incometax.gov.in).

2. Check Eligibility

Confirm that your case qualifies under the scheme’s conditions. Cases involving serious offenses like money laundering, drug trafficking, or tax evasion using undisclosed foreign income may not qualify.

3. Submit Form VSV-1

Log in to your account on the portal and fill Form VSV-1:

• Enter details about your pending litigation.
• Specify assessment years, taxable income in dispute, and tax demand.

4. Receive Certificate

After review, the designated authority will issue a certificate (Form VSV-2) confirming the amount payable.

5. Make the Payment

Taxpayers must deposit the settled amount as specified in Form VSV-2 within the given timeline to finalize the dispute.

6. Submit Proof of Payment

After making the payment, submit proof in Form VSV-3 to officially withdraw from ongoing appeals and disputes.

Why Should Taxpayers Act Now?

The advantages of resolving disputes under this scheme include:

• Significant waiver of interest and penalties.
• Avoiding protracted litigation and its associated costs.
• Assurance of final closure of tax cases.

However, delay can result in:

• Higher interest accumulation and penalties after the cutoff date.
• Missing the opportunity for settlement under favorable terms.

Time is of the Essence

The deadline to file under the Vivad Se Vishwas Scheme is imminent. Taxpayers are urged to consult their Chartered Accountants or tax consultants immediately to assess their eligibility and compute the payable amounts. With less than 10 days remaining, prompt action is crucial.

By settling disputes early, taxpayers contribute to a smoother taxation system, and the government ensures faster resolution of pending cases. Don’t wait until the last minute—file now!

Read More: GST Officers Can’t Adopting Same Template For All Demand Orders: Delhi High Court

Circular Details

Circular No. 20/2024

Date: 30/12/2024