Overview on Vivad Se Vishwas Scheme

Overview on Vivad Se Vishwas Scheme 2024

Vivad Se Vishwas Scheme 2024 offers a streamlined process for taxpayers to resolve long-standing tax disputes efficiently. By providing a clear path to settle disputes, the scheme aims to reduce litigation, bring relief to taxpayers, and enhance the efficiency of tax administration.

The Vivad Se Vishwas Scheme 2024, introduced in the Finance (No. 2) Bill 2024, aims to reduce tax disputes and litigation under the Income-tax Act, 1961. It offers taxpayers a simplified mechanism to settle disputes by paying a portion of the tax arrears under favorable terms. Main primary Goal of Vivad Se Vishwas Scheme 2024 is to reduce the volume of pending tax disputes. Provide taxpayers an opportunity to resolve litigation by paying a portion of disputed tax, interest, and penalties. Offer immediate relief to taxpayers and improve tax administration efficiency.

Key Terminology used in Vivad Se Vishwas Scheme 2024:

• Appellant: Any person with an appeal, writ petition, or special leave petition pending before an appellate forum as of July 22, 2024.
• Objections Before the Dispute Resolution Panel (DRP):
  • A person with objections filed under section 144C of the Income-tax Act, 1961, where the DRP has not issued directions by the specified date.
  • If DRP has issued directions under section 144C(5) but the assessment is incomplete under section 144C(13), the case is also covered.
• Disputed Income: The total or part of the total income related to the disputed tax for an assessment year.
• Tax Arrear: The aggregate amount of disputed tax, interest chargeable/charged on such disputed tax, and penalty leviable/levied on such disputed tax, or the disputed interest, penalty, or fee.
• Pending Revision Applications: A person with a revision application under section 264 of the Income-tax Act, 1961, pending as of the specified date.
• Disputed Tax
  • The term “disputed tax” under the Vivad Se Vishwas Scheme 2024 refers to the income-tax, including surcharge and cess, payable by the appellant for an assessment year or financial year. The computation of the disputed tax varies based on the status of the legal proceedings as of the specified date (22nd July 2024):
    • Pending Appeals or Petitions: The amount payable if the case were decided against the appellant.
    • Objections Before DRP: The amount payable if the DRP were to confirm the variations proposed in the draft order.
    • DRP Directions Issued but Assessment Incomplete: The amount payable as per the assessment order to be passed.
    • Pending Revision Applications: The amount payable if the revision application were not accepted.
    • Additionally, if the dispute relates to the reduction of tax credit under section 115JAA or section 115JD, or any loss or depreciation, the appellant has the option to either:
      • Include the tax amount related to such tax credit or loss/depreciation in the disputed tax, or
      • Carry forward the reduced tax credit or loss/depreciation as prescribed.
• The Disputed Interest: Interest determined under the Income-tax Act, not charged or chargeable on disputed tax, with an appeal filed by the appellant concerning such interest.
• Disputed Penalty: Penalty determined under the Income-tax Act, not levied or leviable in respect of disputed income or disputed tax, with an appeal filed by the appellant concerning such a penalty.
• Declarant: A person who files a declaration under section 91 of the scheme.
• Designated Authority: An officer not below the rank of a Commissioner of Income-tax, notified for the scheme’s purposes.
• Disputed Fee: Fee determined under the Income-tax Act, with an appeal filed by the appellant concerning such a fee.

Procedure for Availing the Vivad Se Vishwas Scheme 2024

The Vivad Se Vishwas Scheme 2024 represents a significant step towards resolving tax disputes efficiently and reducing litigation. By providing taxpayers with an opportunity to settle their disputes on favorable terms, the scheme not only aims to clear the backlog of pending cases but also seeks to improve the overall tax administration system. Taxpayers are encouraged to take advantage of this scheme to resolve their disputes and achieve certainty in their tax affairs.

1. Filing of Declaration and Payment of Amounts:

   • Declarant files a declaration under section 90 (Finance Act (No. 2) Bill, 2024) before the designated authority, in a prescribed form and manner.
   • The designated authority determines the payable amount within 15 days of receiving the declaration and issues a certificate containing particulars of the tax arrear and the determined amount.

2. Payment and Intimation:

   • The declarant pays the determined amount within 15 days of receiving the certificate and intimates the payment details to the designated authority in the prescribed form.
   • Designated authority then issues an order stating that the declarant has paid the amount.

3. Effect on Appeals:

   • Upon filing the declaration, any appeal pending before the Income Tax Appellate Tribunal, Commissioner (Appeals), or Joint Commissioner (Appeals) regarding the disputed income, interest, penalty, fee, or tax arrear is deemed withdrawn from the date the certificate is issued by the designated authority under section 92(1).

4. Withdrawal of Appeals/Writ Petitions:

   • If the declarant has an appeal or writ petition pending before an appellate forum or court, they must withdraw such appeal or petition with the court’s leave, where required, after the certificate issuance under section 92(1) and furnish proof of such withdrawal along with the intimation of payment to the designated authority.

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