Direct Tax Vivad Se Vishwas Scheme 2025: Simplify Your Income Tax Disputes
If you have unresolved income tax issues, the Direct Tax Vivad Se Vishwas Scheme 2025 can help you solve them easily. Announced in the Union Budget for 2024-25, this scheme lets taxpayers clear their pending direct tax disputes by offering relief from penalties, interest, and prosecution.
The scheme is implemented through the Finance (No. 2) Act, 2024 and started on 1st October 2024. Its goal is to reduce the number of tax cases in courts and provide quick settlements for pending disputes, which benefits both taxpayers and the government.
What is the Direct Tax Vivad Se Vishwas Scheme 2025?
This scheme was first started in 2020 to help solve disputes related to direct taxes like income tax. It lets taxpayers pay the disputed tax amount and get relief from interest, penalties, and legal actions.
In 2025, the scheme continues to help taxpayers with pending appeals, allowing them to avoid long court battles and making tax collection faster for the government.
Main Details of Direct Tax Vivad Se Vishwas Scheme
| Purpose | Speed up resolution of pending direct tax disputes |
| Initial Launch | 2020 |
| Eligible Disputes | Income tax disputes including appeals, arbitration, writ petitions, & special leave petitions |
| Original Payment Deadline | March 31, 2020 (extended later; payments after may have extra charges) |
| Tax Payment Requirement | Full payment of disputed tax (100%), or 125% for search-related cases |
| Waivers Offered | Interest, penalties, and prosecution waived on settlement |
| Partial Settlements | For disputes only about interest or penalty, paying 25% of disputed amount settles the case |
| Payment After Deadline | Higher payment percentages apply, but penalties still reduced significantly |
| Excluded Taxes | Wealth tax, Securities Transaction Tax (STT), Commodity Transaction Tax (CTT), etc. |
| Finality of Settlement | Once settled under scheme, no further appeals allowed on those disputes |
| Benefits for Taxpayers | Lower financial burden and quick resolution of issues |
| Benefits for Government | Faster tax collection and fewer disputes clogging courts |
Main Highlights of the Vivad Se Vishwas Scheme
- Easy Settlement: Pay your disputed income tax amount and get waivers on penalties and interest.
- Penalty Waivers: Settle disputes before the deadline to avoid extra fines or interest.
- Extended Deadlines: Although the original deadline was March 31, 2020, some extensions were given; payments after the deadline require higher tax payments.
- Who Can Apply: Any taxpayer involved in income tax disputes, whether you or tax authorities started them.
- Less Court Cases: Helps reduce the backlog of cases and speeds up the overall tax settlement process.
Details on Direct Tax Vivad Se Vishwas Scheme 2025 Implementation
The scheme came into effect on 1st October 2024 under the Finance (No. 2) Act, 2024. The government also released rules and forms through Notification No. 104/2024 on 20.09.2024, explaining how taxpayers can apply and benefit from this scheme.
Here are four important forms you should know about:
- Form-1: For filing your declaration and promise.
- Form-2: Certificate issued by the authorized officer confirming your case details.
- Form-3: Notification of payment made by you.
- Form-4: Official order confirming full and final settlement of your tax dues.
These forms help make the process smooth, clear, and easy to follow for every taxpayer wanting to solve their income tax disputes.