Vivad se Vishwas Scheme, 2024 of Direct Tax: Simplifying Tax Disputes Resolutions

At Book My Accountant, we well understand the plight of taxpayers who cannot manage unresolved tax disputes. To reduce this concern, the Central Government has brought in the Direct Tax Vivad se Vishwas Scheme, 2024. The scheme aims to ease legal disputes by offering a direct tax solution for many struggling individuals. Let us take a closer look into this scheme and how it can help you.

The Direct Tax Vivad se Vishwas Scheme, 2024 was enacted under section 99 of Finance Act, 2024, and is expected to come into effect from October 1, 2024. This scheme aims to expedite tax dispute resolution without burdening appellate authorities, benefiting taxpayers and the Income Tax Department.

This Scheme shall benefit :

  • An Appellant who files an appeal, writ petition or special leave petition.
  • A person against whom an appeal has been filed by the Income Tax Department.
  • Any one whose case is pending in the Supreme Court, High Court, ITAT or Commissioner (Appeals) as on July 22, 2024.

Taxpayers must submit their relief claim under the Vivad se Vishwas Scheme via Form 1 on the Income Tax portal. On filing, the declaration would be verified by the designated authority. Upon confirmation, the designated authority calculates and informs the appellant of the amount due within 15 days via Form 2.

Amount payable under the scheme will depend upon the following factors:

  • Disputed Tax Cases: If an appeal is made after January 31, 2020 and was pending as of July 22, 2024, then the taxpayer is liable to pay the disputed tax that will carry cess and surcharge. But if petitioning is done during or before January 31, 2020, then a penalty of 10% on the amount of the disputed tax will be levied. If the amount is not paid till December 31, 2024.
  • Disputed Interest, Penalty, or Fee: Appeals concerning disputed interest, penalty or fee shall start requiring from January 31, 2020 onwards to pay 25% of the amount in dispute. Appeals to the date filing January 31, 2020 shall request a payment of 35% of the amount in dispute and the deadline date will remain on December 31, 2024, and thereafter draw additional penalties.

Applying the Direct Tax Vivad se Vishwas Scheme, 2024 can significantly reduce your tax liability and help resolve pending tax issues effectively.

"According to experts- Ashish Chorasia, Taxation Head, S.K. Dhanania & Co. this is to be availed by individuals whose income is less than Rs 50 Lakhs with not much variation in the assessed income. This will have lower liabilities for eligible taxpayers under DTVSV 2024 compared to E-DRS."

Amount paid under the scheme No refund Any amount paid under the scheme is non-refundable. However, if an excess payment has been made before filing Form 1, the excess amount (without interest) will be refunded. Appeals The following are not eligible for this scheme:

  1. Search assessments
  2. Cases wherein undeclared income/asset is abroad, or
  3. Prosecution has started.

This document is general information and is not intended to be advice or legal opinion on any matter. Readers should seek appropriate professional advice before acting on the basis of any information contained herein.

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