The Direct Tax Vivad Se Vishwas (DTVSV) Scheme, 2024, is here to help people settle their pending income tax problems. This scheme was announced by the Union Finance Minister in the Union Budget for 2024-25. The DTVSV Scheme was made real through the Finance (No. 2) Act, 2024.
What’s cool about this scheme is that it makes fixing tax disputes easier for everyone. If you have any income tax issues hanging around, this is a great chance to solve them.
CBDT issues Guidance Note 1/2024 in the form of frequently asked questions (FAQs) on provisions of the Direct Tax Vivad Se Vishwas (DTVSV) Scheme, 2024. Circular No. 12 of 2024 was issued on 15.10.2024.
About Direct Tax Vivad se Vishwas Scheme 2024
The Vivad Se Vishwas Scheme was introduced by the Government of India in 2020 to resolve disputes related to direct taxes. The scheme aimed to reduce litigation and settle tax disputes by offering taxpayers the opportunity to pay disputed taxes and, in return, receive certain concessions or waivers, such as relief from interest, penalties, and prosecution.
Key Summary Direct Tax Vivad se Vishwas Scheme 2024
| Scheme Objective | To resolve pending direct tax disputes and reduce litigation. |
| Launch Year | 2020 |
| Eligible Disputes | Disputes related to income tax (including appeals, arbitration, writ petitions, and special leave petitions). |
| Payment Deadline (Without Extra Charge) | Initially March 31, 2020 (extended later); beyond this date, additional charges may apply. |
| Tax Payment Requirement | Taxpayer must pay 100% of the disputed tax (125% if the tax relates to search cases). |
| Waiver | Waiver of interest, penalties, and prosecution upon settlement. |
| Reduced Payment for Penalties/Interest | If the dispute relates only to interest or penalty (not tax), taxpayers can settle by paying 25% of the disputed amount. |
| Payment after Deadline | For payments made after the original deadline, a higher percentage of disputed tax may be required. |
| Exclusions | Disputes relating to wealth tax, securities transaction tax (STT), commodity transaction tax (CTT), etc., were not covered. |
| Settlement Finality | Once the dispute is settled under the scheme, no further appeals are allowed on the settled issue. |
| Taxpayer Benefit | Significant reduction in the financial burden (due to waivers) and avoidance of lengthy litigation. |
| Government Benefit | Faster collection of disputed taxes and reduction of case backlogs in courts and tribunals. |
| Outcome | Thousands of disputes settled, resulting in the collection of substantial tax revenues and reduced litigation load. |
Key Features of the DTVSV Scheme
- Settlement of Tax Disputes: Taxpayers who have pending disputes with the income tax department can settle them by paying the disputed tax amount. In return, they receive waivers on interest and penalties.
- Waiver of Penalties: If the taxpayer opts to settle the dispute by March 31, 2020 (extended in some cases), they were not required to pay any interest or penalties on the disputed amount.
- Payment after March 31, 2020: For payments made after this date, a percentage of additional disputed tax is levied, but still with a significant reduction in penalties.
- Eligibility: Any taxpayer with disputes in appeals or arbitration, either initiated by them or by the tax authorities, could opt for the scheme.
- Focus on Litigation Reduction: The scheme was part of a larger government initiative to reduce the backlog of cases in appellate forums, which included thousands of pending disputes.
Direct Tax Vivad se Vishwas Scheme, 2024
(DTVsV Scheme, 2024)is a scheme notified by the Government of India on 15th October 2024 to resolve pending appeals in case of income tax disputes. The DTVsV Scheme, 2024 was enacted vide Finance (No. 2) Act, 2024. The said scheme shall come into effect from 01.10.2024. The rules and forms for enabling the scheme have been notified vide Notification No. 104/2024 dated 20.09.2024. Four separate Forms have been notified for the purposes of the Scheme. These 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