Vivad Se Vishwas Scheme 2024: Settle income tax disputes by December 31 to avoid penalties

Vivad se Vishwas Scheme 2024: Taxpayers facing income tax disputes can choose to settle their tax disputes under the Vivad se Vishwas Scheme 2024. This scheme was announced in Budget 2024 and allows taxpayers to pay a lower tax amount. “Under this scheme, you must pay the disputed tax amount and a specified percentage of this amount along with Form 1 to the Income Tax Department. Once this amount is deposited, the Income Tax Department will close the dispute and waive all the additional penalties and interest applicable,”said Abhishek Soni, CEO of Tax2win.

However, this opportunity is only available till 31st December 2024. Any application made on or after 1st January 2025 will not be eligible for a lower tax amount under the Vivad Se Vishwas Scheme

If taxpayers file a declaration before December 31, 2024, they must pay 100 per cent of the disputed tax demand. Interest and penalties are waived in such cases.

If the declaration is made on or after January 1, 2025, the taxpayer must pay 110 percent of the disputed tax demand.

Vivad Se Vishwas Scheme 2024

Finance Minister Nirmala Sitharaman unveiled the Vivad Se Vishwas Scheme 2024 in July to settle outstanding income tax issues at the Annual Budget 2024–25 presentation. Vivad Se Vishwas 2.0 became operational on 1 October 2024.

Meanwhile, according to the Income Tax Department, all appeals that are still outstanding as of July 22, 2024, will be eligible for the Vivad Se Vishwas Scheme 2024 regardless of whether they are eventually withdrawn or disposed of.

According to revised FAQs released by the CBDT, taxpayers must submit a declaration by December 31, 2024, to be eligible for the program. If an outstanding appeal on July 22, 2024, is resolved before the declaration is filed, the contested tax will be computed as though it were still pending. In this case, the appeal will still be eligible for settlement under the plan.

Forms for the implementation of the Vivad Se Vishwas Scheme 2.0:

• Form 1: Declaration and Undertaking form to be filed by the declarant
• Form 2: Certificate to be issued by the Designated Authority
• Form 3: Intimation of payment form by the declarant
• Form 4: Order for full and final settlement of tax arrears by the Designated Authority.

Vivad Se Vishwas Scheme 2024: Eligibility

The following taxpayers are qualified, per an October 15, 2024, income tax department circular:

-A person for whom, as of July 22, 2024, an appeal, writ petition (WP), or special leave petition (SLP) has been filed before an appellate body, either by the individual, the income tax authority, or both.

-A person who, following Section 144C of the Income Tax Act, filed complaints with the Dispute Resolution Panel (DRP) and who, by July 22, 2024, has not received a directive from the DRP.

-A person for whom the Assessing Officer (AO) has not finished the assessment under Section 144C(13) by July 22, 2024, despite the DRP having given instructions under Section 144C(5).

-An individual whose application for revision under Section 264 of the Income Tax Act has not yet been processed.

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