Vivad Se Vishwas Scheme 2024 Income Tax: Start Date, Eligibility, How to Apply, and Required Forms

The Government announced Vivad Se Vishwas Scheme 2.0 in the Budget 2024. This scheme has been introduced to resolve income tax disputes under appeal. It will come into effect on 1st October, 2024. In this article, we will explain about the following:

• Introduction of Vivad Se Vishwas Scheme 2.0
• Applicability of Vivad Se Vishwas Scheme 2.0
• Amount to be paid under the scheme
• Forms
• Important points
• FAQs

Latest Update

The Central Board of Direct Taxes (CBDT) has extended the deadline for determining payable amounts under the Direct Tax Vivad Se Vishwas Scheme, 2024, from December 31, 2024, to January 31, 2025.

Vivad Se Vishwas Scheme 2.0

The Vivad Se Vishwas Scheme 2.0 aims to simplify the process of resolving pending income tax litigation. It allows eligible taxpayers to settle their tax disputes by paying a specified portion of their outstanding dues.

Applicability of Direct Tax Vivad Se Vishwas Scheme

The disputes/appeals, including writs, filed by either the taxpayer or the tax authorities which are pending as on 22nd July, 2024:

• The Supreme Court, High Court, Income Tax Appellate Tribunal, Commissioner/Joint Commissioner(Appeals)
• The Dispute Resolution Panel(DRP) or where DRP has issued orders but the final assessment order is awaited
• Revision application filed under Section 264 of the Income-tax Act,1961.

Amount Payable under Vivad se Vishwas Scheme 2.0

The amount to be paid by the taxpayers under the Scheme is as follows:

The amount payable will be reduced to 50% in the following scenarios:

• The appeal was filed by tax authorities
• The appeal was filed before any authority, and an order in favour of the taxpayer was received and a higher authority has not reversed such an order.

Note: Where the dispute is related to the reduction of MAT/AMT (Minimum alternative tax/ Alternative Minimum tax) credit or loss or depreciation, the taxpayer will have an option to include the amount of tax related to such tax credit/loss/depreciation in the disputed taxes or carry forward the reduced MAT/AMT credit or loss/depreciation.

How to Apply for Vivad Se Vishwas Scheme 2.0

Step 1: Review any tax arrears or disputes you wish to resolve under the VSV 2.0 scheme.

Step 2: Complete Form-1, which includes all necessary details as notified by the tax authority. Ensure that the declaration is submitted to the Designated Authority (a tax officer not below the rank of Chief Income Tax Officer).

Step 3: After submission, you will receive an electronic receipt acknowledging your declaration.

Step 4: Any appeal pending before the CIT(A) or ITAT regarding the same tax arrears will be considered withdrawn effective from the date the certificate is issued by the Designated Authority. If you have filed a writ petition with the High Court or Supreme Court, you have to withdraw those appeals.

Step 5: After processing your declaration, the Designated Authority will issue a certificate in Form-2 confirming the withdrawal of appeals.

Step 6: After receiving Form-2, proceed to make the payment as per the instructions provided.

Step 7: Complete Form-3 to furnish an intimation of the payment made along with proof of withdrawal of any pending appeals. Submit Form-3 to the Designated Authority electronically.

Step 8: The Designated Authority will issue a final order in Form-4 regarding the payment made and confirm the closure of the tax arrears dispute.

Step 9: Alongside the declaration, you will need to submit an undertaking waiving your right to seek any remedy related to the tax arrears.

Notified Forms

The government has notified four forms for the purpose of Vivad Se Vishwas Scheme 2.0. They are as follows:

• Form-1: Form for filing declaration and Undertaking by the declarant
• Form-2: Form for Certificate to be issued by Designated Authority
• Form-3: Form for Intimation of payment by the declarant
• Form-4: Order for Full and Final Settlement of tax arrears by Designated Authority

The DTVSV Scheme stipulates that Form-1 must be submitted separately for each dispute. However, if both the appellant and the income tax authority have filed an appeal concerning the same order, a single Form-1 should be submitted in that instance.

Payment notification is to be completed using Form-3, which must be submitted to the Designated Authority along with proof of withdrawal of the appeal, objection, application, writ petition, special leave petition, or claim. Forms 1 and 3 are required to be submitted electronically by the declarant.

Other Important Points

• Filing a declaration under the VSV Scheme 2024 does not mean that the taxpayer has accepted or conceded to the tax assessment.
• It grants immunity provided from any proceedings, penalties, or interest related to tax arrears for cases opted into the scheme.
• It does not apply to certain cases, including those involving search and seizure, prosecution, undisclosed income or assets located abroad, or matters under other specified laws.