Vivad se Vishwas Scheme 2024

The Direct Tax Vivad se Vishwas Scheme, 2024 ("VSV Scheme, 2024") is a new initiative proposed in the Finance (No. 2) Bill, 2024. The primary objective of this scheme is to reduce the burden of pending income tax litigation by providing a mechanism for taxpayers to settle their disputes with the tax authorities. The VSV Scheme, 2024 closely follows the framework of the previous Vivad se Vishwas Scheme introduced in 2020, offering similar relief measures for taxpayers who wish to resolve their disputes and clear their tax arrears.

Eligibility for the VSV Scheme, 2024

• Where an appeal is pending before the Commissioner (Appeals), NFAC, ITAT, High Court or Supreme Court as on 22-July-2024.

• The revision application is pending before the Commissioner under Section 264 as on 22-July-2024.

Tax Payable Under the VSV Scheme, 2024

Appeal relating to Tax

Appeal filed date	Paid by 31-12-2024	After 31-12-2024
After 31-03-2020	100%	110%
Up to 31-03-2020	110%	120%

Would get a complete waiver on interest and penalty.

Appeal relating to Penalty, Interest & Late fee

Appeal filed date	Paid by 31-12-2024	After 31-12-2024
After 31-03-2020	25%	30%
Up to 31-03-2020	30%	35%

Special Provisions

The above payable amount would be reduced by 50% in the following cases:

• Appeal is filed by the Income tax department.

• Where a taxpayer has already received a favourable decision on an issue from a higher appellate forum (Assessee’s own case)

Procedure for Availing the VSV Scheme, 2024

1. File a Declaration: Submit a declaration in the tax portal before CIT.

2. Withdraw Appeals: Withdraw appeal/writ before High court or Supreme court. Appeal pending before the CIT(A)/NFAC or ITAT is deemed withdrawn.

3. Payment of Tax Arrears: The Designated Authority will issue a certificate detailing the amount payable within 15 days. The taxpayer must pay this amount within 15 days of receiving the certificate and notify the Designated Authority of the payment.

4. If the amount is not paid within 15 days of receiving the certificate, then the declaration is considered as void.

Exclusions from the VSV Scheme, 2024

• Search cases.

• Cases where prosecution has been initiated.

• Cases involving undisclosed income or assets located outside India.

• Assessments based on information received under a DTAA.

Other points

Cases where the time limit for filing the appeal has not expired as of July 22, 2024, but the appeal has not been filed. There is no clarity on the matter; however, such cases were covered under the 2020 scheme. Clarification is awaited on this.

Conclusion

The VSV Scheme, 2024 offers taxpayers a valuable opportunity to settle their pending income-tax disputes with reduced financial burdens and immunity from further prosecution or penalties. Taxpayers should carefully evaluate their ongoing litigation and consider whether the VSV Scheme 2024 is a viable option for resolving their tax disputes.

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