Vivad Se Vishwas Scheme 2024 | Income Tax: Start Date, Eligibility, How to Apply, and Required Forms

The Vivad Se Vishwas Scheme 2.0 was introduced by the Government of India during the Budget 2024 to provide taxpayers a streamlined way to resolve income tax disputes. It aims to reduce litigation and expedite pending cases under appeal. The scheme will officially come into effect on October 1, 2024.

This article explains the key aspects of the Vivad Se Vishwas Scheme 2.0, including:

• Introduction to the Vivad Se Vishwas Scheme 2.0
• Eligibility and applicability
• Payment requirements under the scheme
• Notified forms for filing
• Application process
• Important points to remember
• FAQs

Vivad Se Vishwas Scheme 2.0 | Overview of the Scheme

The Vivad Se Vishwas Scheme 2.0 simplifies the resolution process for pending income tax disputes. This scheme allows taxpayers to settle disputes by paying a specific portion of the outstanding tax dues. The goal is to promote faster resolution of disputes and reduce the burden of pending litigation on the judiciary and the tax department.

Applicability of Vivad Se Vishwas Scheme 2024 | Who Can Benefit?

The Vivad Se Vishwas Scheme applies to disputes and appeals that were pending on or before July 22, 2024, including:

• Cases pending before the Supreme Court, High Courts, Income Tax Appellate Tribunals (ITAT), or Commissioner (Appeals)
• Disputes referred to the Dispute Resolution Panel (DRP) where the final assessment order is yet to be issued
• Revision applications filed under Section 264 of the Income Tax Act, 1961

Payment Requirements under Vivad Se Vishwas Scheme | Amount to Be Paid

The amount payable under the Vivad Se Vishwas Scheme 2.0 depends on when the appeal was filed and when the payment is made:

Reduction of Payment:

• If the tax authorities filed the appeal, taxpayers can settle by paying only 50% of the disputed amount.
• If the taxpayer had received a favorable order that was not overturned by higher authorities, the 50% reduction will also apply.

How to Apply for Vivad Se Vishwas Scheme | Step-by-Step Process

Application Process Explained

1. Review Your Tax Disputes:
   Evaluate your pending tax disputes to decide if you want to resolve them under the scheme.
2. Fill Form-1:
   Complete Form-1 with the required details. Submit the declaration to the Designated Authority, typically a tax officer of Chief Income Tax Officer rank or above.
3. Receive Electronic Acknowledgment:
   Upon submitting Form-1, an electronic receipt will be generated for your declaration.
4. Withdrawal of Appeals:
   If your dispute is under appeal at the CIT(A) or ITAT, the appeal will be considered withdrawn once the Designated Authority issues a certificate in Form-2.
   • For disputes in High Courts or the Supreme Court, you must submit a request to withdraw your appeal.
5. Payment of Tax Dues:
   After receiving Form-2, make the payment following the provided instructions.
6. Complete Form-3:
   Use Form-3 to notify the tax department about the payment and provide proof of the withdrawal of appeals, if any. Submit this form electronically.
7. Final Settlement:
   Once the payment and appeals are confirmed, the Designated Authority will issue Form-4, officially closing the dispute.
8. Submit Undertaking:
   Along with the declaration, taxpayers must submit an undertaking stating they will not seek any further remedy regarding the resolved disputes.

Notified Forms for Vivad Se Vishwas Scheme | Essential Forms

The following forms are required to complete the process under the Vivad Se Vishwas Scheme:

• Form-1: Declaration and undertaking by the taxpayer
• Form-2: Certificate issued by the Designated Authority confirming appeal withdrawal
• Form-3: Intimation of payment by the taxpayer
• Form-4: Final order confirming settlement of the tax arrears

Note:

• A separate Form-1 must be submitted for each dispute unless both the taxpayer and tax authority have filed appeals for the same order.
• Form-3 must be submitted with proof of appeal withdrawal. All forms are to be submitted electronically.

Key Points to Remember about Vivad Se Vishwas Scheme | Important Considerations

1. Immunity from Penalty and Interest:
   Once you opt into the scheme, you will receive immunity from any penalties, interest, or further proceedings related to the dispute.
2. Non-Acceptance of Tax Assessment:
   Filing a declaration under the scheme does not mean the taxpayer concedes to the tax assessment. It simply provides a resolution mechanism for pending disputes.
3. Exceptions to the Scheme:
   The scheme does not apply to disputes involving:
   • Search and seizure cases
   • Undisclosed income or assets located abroad
   • Prosecution under income tax law
   • Matters involving other specific laws

FAQs about Vivad Se Vishwas Scheme | Frequently Asked Questions

• What is the purpose of the Vivad Se Vishwas Scheme 2.0?
  This scheme helps taxpayers resolve pending income tax disputes by paying a specific portion of their dues, promoting quicker resolution of cases.
• When does the Vivad Se Vishwas Scheme come into effect?
  The scheme will come into effect on October 1, 2024.
• Does opting for the scheme mean I accept the tax assessment?
  No, opting for the scheme does not imply acceptance of the tax assessment. It only facilitates dispute resolution.
• What if my dispute involves MAT/AMT credits?
  If your dispute concerns MAT/AMT credit or losses, you can either include the related tax amount in the dispute or carry forward the reduced credit or loss.

Conclusion | Final Thoughts on Vivad Se Vishwas Scheme

The Vivad Se Vishwas Scheme 2.0 offers an effective way for taxpayers to resolve their pending disputes with the tax authorities. It encourages faster closure of litigation by providing financial relief and immunity from penalties. With the 1st October 2024 start date approaching, eligible taxpayers should consider opting for this scheme to avoid prolonged legal proceedings. The scheme not only reduces the financial burden but also helps build a smoother compliance environment.

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