The Direct Tax Vivad Se Vishwas Scheme 2024 is a government initiative designed to resolve ongoing tax disputes with the Income Tax Department efficiently. By opting into the scheme, taxpayers can settle their disputes by paying the disputed amount and a defined percentage, thus avoiding penalties and additional charges. This scheme is an excellent opportunity for taxpayers to clear liabilities, with reduced costs available until December 31, 2024. Here’s everything you need to know.
Overview of the Scheme
The Vivad Se Vishwas Scheme was introduced during the Budget 2024 speech by Union Finance Minister Nirmala Sitharaman. It aims to:
- Simplify tax dispute resolution.
- Reduce litigation.
- Provide a time-bound mechanism to settle outstanding cases.
By paying the disputed tax amount along with a specified percentage, taxpayers can close their cases without incurring penalties or interest.
Why Act Before December 31, 2024?
The scheme offers distinct financial advantages for taxpayers who act within the stipulated timeframe:
- Applications filed before December 31, 2024: Pay only 100% of the disputed tax demand.
- Applications filed on or after January 1, 2025: Pay 110% of the disputed tax demand.
This 10% increase highlights the urgency of submitting declarations early. The penalties for delayed submissions are structured as follows:
| Category | Payable on Dec 31, 2024 | Payable on Jan 1, 2025 |
|---|---|---|
| New appellant: Disputed tax | 100% of disputed tax | 110% of disputed tax |
| Old appellant: Disputed tax | 110% of disputed tax | 120% of disputed tax |
| New appellant: Disputed penalty/fee | 25% of disputed penalty | 30% of disputed penalty |
| Old appellant: Disputed penalty/fee | 30% of disputed penalty | 35% of disputed penalty |
Eligibility Criteria
The scheme is open to taxpayers involved in various disputes as of July 22, 2024:
- Pending appeals with appellate authorities.
- Writ petitions or special leave petitions awaiting decisions.
- Cases under review by the Dispute Resolution Panel (DRP).
- Appeals or revisions under Section 264 that remain unresolved.
Taxpayers must ensure they meet these criteria to qualify for settlement.
Forms Required for Declaration and Settlement
To participate in the scheme, applicants must submit specific forms via the Income Tax Department’s e-filing portal:
- Form 1: Declaration and Undertaking.
- Form 2: Certificate issued by the Designated Authority.
- Form 3: Notification of payment.
- Form 4: Final settlement order confirming closure of the case.
Steps to Avail of the Vivad Se Vishwas Scheme
- Submit Declaration: Taxpayers must file Form 1 electronically on the Income Tax Department’s portal by December 31, 2024.
- Make Payment: Pay 100% of the disputed tax or applicable percentage before the deadline.
- Receive Confirmation: The Income Tax Department will issue Form 4 upon case resolution.
Why Choose Vivad Se Vishwas Scheme?
The scheme is designed to streamline dispute resolution while benefiting taxpayers:
- Eliminates Additional Costs: No penalties or interest on disputed amounts if settled before the deadline.
- Simplifies Process: Easy online submission and resolution mechanism.
- Provides Certainty: Once resolved, disputes are permanently closed.
Key Deadlines to Remember
- July 22, 2024: Appeals and objections filed by this date are eligible.
- December 31, 2024: Last date to submit applications for reduced settlement costs.
- January 1, 2025: Revised rates come into effect, increasing settlement costs.
Conclusion
The Direct Tax Vivad Se Vishwas Scheme 2024 is a golden opportunity for taxpayers to resolve disputes without the burden of penalties and additional interest. With the December 31 deadline fast approaching, taxpayers should act swiftly to take full advantage of this initiative.
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