The Income Tax Department has announced the launch of the Vivad Se Vishwas 2.0 dispute resolution scheme, offering reduced settlement amounts for taxpayers who file declarations by 31 December 2024.
This initiative, unveiled on Saturday, aims to resolve outstanding appeals related to income tax disputes.
Finance Minister Nirmala Sitharaman introduced the Direct Tax Vivad Se Vishwas Scheme 2024 during her budget speech, stating it will take effect from 1 October 2024. The Central Board of Direct Taxes (CBDT) confirmed that the scheme will provide more favourable terms for 'new appellants' compared to 'old appellants'.
Four specific forms have been notified for the scheme: Form-1 for filing declarations, Form-2 for certificates issued by the Designated Authority, Form-3 for payment notifications, and Form-4 for final settlement orders.
Taxpayers must submit Form-1 for each dispute, although a single form may be filed if both the appellant and the income tax authority have appealed the same order.
Payment notifications in Form-3 must be submitted to the Designated Authority along with proof of the withdrawal of any appeals or petitions. Forms 1 and 3 are to be filed electronically via the Income Tax Department's e-filing portal.
The introduction of the scheme comes amid approximately 2.7 crore direct tax demands totalling around ₹35 lakh crore being contested across various legal forums.
Deloitte India Partner Karishma R. Phatarphekar highlighted the urgency for companies to assess their pending income tax litigations, noting that tax payment rates under the scheme will increase by 10% starting 1 January 2025. She emphasised the importance of making timely and informed decisions regarding participation in the scheme.
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