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The Indian government introduced the Vivad Se Vishwas Scheme 2.0 in the 2024 Union Budget. This scheme is designed to help taxpayers settle their income tax disputes more easily and efficiently. If you have any pending income tax appeals, this scheme might be a useful option for you. In this post, we'll cover everything you need to know about Vivad Se Vishwas 2.0, including the start date, eligibility criteria, how to apply, and the forms required.
What is the Vivad Se Vishwas Scheme 2.0?
The Vivad Se Vishwas Scheme 2.0 helps taxpayers resolve ongoing income tax litigation. By participating, you can settle your tax disputes by paying a certain percentage of your outstanding dues, depending on the stage of the appeal.
When Does the Scheme Start?
The scheme will officially start on October 1, 2024. It provides an opportunity to settle disputes before the next tax filing season.
Who is Eligible for Vivad Se Vishwas 2.0?
The scheme applies to income tax disputes and appeals filed either by taxpayers or tax authorities that are pending as of July 22, 2024. These disputes could be at various levels:
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Supreme Court
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High Court
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Income Tax Appellate Tribunal (ITAT)
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Commissioner/Joint Commissioner (Appeals)
It also includes cases where the Dispute Resolution Panel (DRP) has issued orders, but the final assessment order is still pending, or where a revision application has been filed under Section 264 of the Income Tax Act, 1961.
How Much Do You Have to Pay?
The amount you need to pay under the scheme depends on when the appeal was filed and when you plan to settle:
| Nature of Tax Arrear | Amount Payable on or before 31st December 2024 | Amount Payable on or after 1st January 2025 | ||
|---|---|---|---|---|
| Appeal filed after 31st January 2020 but on or before 22nd July 2024 | Appeal pending at same forum on or before 31st January 2020 | Appeal filed after 31st January 2020 but on or before 22nd July 2024 | Appeal pending at same forum on or before 31st January 2020 | |
| Aggregate amount of disputed tax | 100% of disputed tax | 110% of disputed tax | 110% of disputed tax | 120% of disputed tax |
| Disputed interest/penalty/fee | 25% of disputed interest/penalty/fee | 30% of disputed interest/penalty/fee | 30% of disputed interest/penalty/fee | 35% of disputed interest/penalty/fee |
If the appeal was filed by tax authorities, or the case was in the taxpayer's favor but a higher authority has not reversed the decision, you may only need to pay 50% of the amount.
How to Apply for Vivad Se Vishwas Scheme 2.0?
To apply for the scheme, you’ll need to fill out and submit specific forms. Here's a quick guide to the forms:
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Form-1: Declaration and undertaking by the taxpayer (declarant).
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Form-2: Certificate issued by the Designated Authority.
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Form-3: Intimation of payment by the taxpayer.
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Form-4: Final settlement order issued by the Designated Authority.
If you are filing multiple disputes, a separate Form-1 is required for each one. However, if both you and the tax authorities have filed appeals on the same issue, only one Form-1 needs to be submitted.
Key Points to Remember
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Filing under this scheme does not mean you agree with the tax assessment.
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Once you opt into the scheme, you receive immunity from further penalties, proceedings, or interest on the disputed tax arrears.
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The scheme does not apply to certain cases, such as those involving search and seizure, undisclosed foreign assets, or criminal prosecution.
The Vivad Se Vishwas Scheme 2.0 offers a streamlined way to resolve tax disputes and avoid prolonged litigation. If you qualify, this is a great opportunity to settle your tax issues and move forward with a clean slate. Make sure to take advantage of this scheme before the deadlines to avoid paying extra.
