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:
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.
The disputes/appeals, including writs, filed by either the taxpayer or the tax authorities which are pending as on 22nd July, 2024:
The amount to be paid by the taxpayers under the Scheme is as follows:
Nature of tax arrear | Amount payable on or before 31st December 2024 | Amount payable on or after 1st January 2025 | ||
Appeal filed after 31st January 2020 but on or before 22nd July 2024 | Appeal pending at same forum on or before 31st January 2020 | Appeal filed after 31st January 2020 but on or before 22nd July 2024 | Appeal pending at same forum on or before 31st January 2020 | |
Aggregate amount of disputed tax | 100% of disputed tax | 110% of disputed tax | 110% of disputed tax | 120% of disputed tax |
Disputed interest/penalty/fee | 25% of disputed interest/penalty/fee | 30% of disputed interest/penalty/fee | 30% of disputed interest/penalty/fee | 35% of disputed interest/penalty/fee |
The amount payable will be reduced to 50% in the following scenarios:
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.
The government has notified four forms for the purpose of Vivad Se Vishwas Scheme 2.0. They are as follows:
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.
The Government introduced Vivad Se Vishwas Scheme 2.0 to resolve income tax disputes, effective from 1st October, 2024. Taxpayers can settle disputes by paying a portion of outstanding dues. Forms include declaration, certificate, payment intimation, and order for settlement. Scheme does not apply to specific cases like search/seizure or undisclosed assets. Immunity granted from penalties/interest. Filing declaration doesn't imply tax assessment acceptance.