The Central Board of Direct Taxes ( CBDT ) has officially notified the Direct Tax Vivad Se Vishwas Scheme, 2024, which will be operational from October 1, 2024. This scheme is an amnesty initiative aimed at resolving disputes related to direct taxes. It provides taxpayers an opportunity to settle pending tax disputes by paying reduced penalties and interest, thus reducing litigation.
If the tax arrear includes disputed tax, interest, and penalty, the amount payable by the declarant will vary based on the timing of the payment.
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
For disputes arising after January 31, 2020, taxpayers can settle by paying the disputed tax amount by December 31, 2024. If payment is made after January 1, 2025, an additional 10% of the disputed tax will be charged.
For disputes prior to January 31, 2020, taxpayers will need to pay the disputed tax plus 10% by December 31, 2024, and an additional 20% if paid after January 1, 2025.
Where only interest, penalty, or fee is disputed, a 25% payment of the disputed amount must be made by December 31, 2024, increasing to 30% if paid in 2025 for disputes post-January 2020. For pre-January 2020 disputes, the amounts payable rise to 30% and 35% for payments made by December 31, 2024, and afterward, respectively.
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
Taxpayers opting for the scheme must file a declaration with the designated authority. Upon filing, any ongoing appeals related to the tax dispute before the Income Tax Appellate Tribunal ( ITAT ) or Commissioner ( Appeals ) will be deemed withdrawn.
Appeals before higher judicial authorities, such as High Courts or the Supreme Court, must be formally withdrawn with the court’s approval.
Declarants must also provide an undertaking, waiving their right to pursue further remedies related to the disputed tax, penalty, or interest under any other law. No further appellate proceedings will be entertained once the order under Section 92(1) of the Income-tax Act is passed.
The designated authority will issue a certificate determining the amount payable within 15 days of receiving the declaration. Declarants must then make the payment within 15 days of receiving this certificate and notify the designated authority to conclude the process.
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
The scheme does not apply to certain categories of tax arrears, including:
Arrears related to assessments based on searches initiated under Sections 132 or 132A.
Taxpayers with pending prosecution or criminal cases.
Arrears related to undisclosed foreign income or assets.
Cases involving information received under international tax agreements.
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