Author: Khushi J. Prajapati
The Vivad Se Vishwas Scheme, launched by the Indian government, is a significant tax resolution initiative aimed at reducing litigation and settling disputes related to direct taxes. As part of the 2024 revision, the scheme is designed to resolve outstanding tax disputes efficiently and amicably, offering taxpayers a streamlined process to settle their dues.
A unique opportunity exists for taxpayers to settle their outstanding disagreements with the income tax department through this program by paying less than what is owed, hence facilitating compliance and reducing the strain of lengthy litigation.
It is intended by the Vivad Se Vishwas Scheme 2024 to settle any tax dispute quickly and also to clear the numerous pending cases at various forums such as appellate and judicial levels. It offers considerable relief in terms of reduced penalties and interests, thereby encouraging taxpayers to settle their disputes on their terms.
This will help lessen the legal workload for tax officials and also improve how fast the taxation conflicts are solved. The plan is aimed at promoting a friendlier atmosphere regarding tax collection, increasing the contentment experienced by taxpayers, and boosting overall income by settling disputes that have been there for a long time.
Eligibility for Vivad se Vishwas Scheme 2024
- Pending Special Leave Petition – In case there exists an SLP before the given appellate forum at such time, the tax payment that is to be made by the appeals will be computed as per that sum which would have been due if his appeal or writ petition had been lost.
- Pending Objection Before Dispute Resolution Panel- In situations where a disagreement is waiting in front of the Dispute Resolution Panel (DRP) under Section 144C of the Income-tax Act when the specified date is mentioned, a tax which is due from the appellant would be equal to that which shall incur should DRP accept alteration suggested in a draft decree.
- DRP Directions with Incomplete Assessment – If the Dispute Resolution Panel has issued directions under Section 144C(5) and the Assessing Officer has not completed the assessment under Section 144C(13) by the due date, the amount of tax payable will be determined based on the assessment order that the Assessing Officer is likely to pass in compliance with such directions.
- Pending Revision Application- In cases where an application for revision under Section 264 of the Income-tax Act is pending on the cut-off date, the tax amount that the appellant is due to pay is determined as though there has been no acceptance of the revision application.
- Reduction of Tax Credit, Loss, or Depreciation – You have been trained on information until October 2023. In cases involving the decrease of tax credit under Section 115JAA or Section 115JD, or any computed loss or depreciation thereunder, the appellant is allowed to: 1. Add the amount related to such tax credit, loss or depreciation in the dispute of tax amount; or 2. Carry forward the diminished tax credit, as well as the loss and/or depreciation by prescribed regulations.
Amount Payable by Declarant (Vivad se Vishwas Scheme 2024)
| SI NO | Nature of Tax Arrear | Amount Payable by 31st December 2024 | Amount Payable After 1st January 2025 but on or Before the Last Date |
| 1 | Disputed tax, interest, and penalty (appellant filed after 31st January 2020 but before the specified date) | 100% of the disputed tax amount | 110% of disputed tax amount (disputed tax + 10%) |
| 2 | Disputed tax, interest, and penalty (appellant filed on or before 31st January 2020 at the same appellate forum) | 110% of disputed tax amount (disputed tax + 10%) | 120% of disputed tax amount (disputed tax + 20%) |
| 3 | Disputed interest, penalty, or fee (appellant filed after 31st January 2020 but before the specified date) | 25% of the disputed amount | 30% of the disputed amount |
| 4 | Disputed interest, penalty, or fee (appellant filed on or before 31st January 2020 at the same appellate forum) | 30% of the disputed amount | 35% of the disputed amount |
Exclusion of certain cases from this scheme
- The scheme does not apply to tax arrears related to assessments conducted based on a search under Section 132 or 132A of the Income-tax Act. This will ensure that intense scrutiny or investigation can’t be included, since it may involve a variety of complex issues which are beyond the purview of the scheme’s intended relief.
- Additionally, tax arrears linked with prosecution commenced before the declaration date are also excluded, to avoid the use of the scheme in cases already pending in court.
- The plan does not include cases involving undisclosed income or assets situated outside India. This is aimed at ensuring that the scheme does not unintentionally provide relief in circumstances relating to international tax evasion or undisclosed foreign assets, which are usually more complicated and severe.
- Moreover, tax dues arising from assessments based on data received from international tax treaties under Section 90 or 90A have been excluded since they pertain to cross-border tax cases that are likely outside the purview of the scheme and need specialized resolution mechanisms.
- By excluding these categories, the scheme aims at concentrating on less complicated issues thus ensuring its availed relief is focused and effective.
Procedural Aspects
- Determination and Payment (Section 92): The amount payable must be determined by the authority within fifteen days from the date of receipt of the declaration.
- A certificate setting out the tax arrears and the determined amount will be issued by them.
- This amount should be paid by the declarant within fifteen days from the date of receipt of the certificate, and the payment should be reported to the designated authority in the prescribed form.
- The authority shall acknowledge receipt of payment and issue an order to that effect. Orders determining the payable amount shall be conclusive, and no other proceedings can be entertained in respect of similar issues.
- A declaration does not imply acceptance of taxable status nor does it interfere with pending appeals or legal actions.
- Immunity from Proceedings (Section 93): As mandated by Section 92, no more actions regarding tax arrears, after all penalties, are to be taken against offenders by the officials concerned.
- Refund of Amount (Section 94): Section 91 payments cannot be refunded; and if the declarant paid more than necessary before the announcement was made, they will receive back what is theirs but there is no interest to be paid on it according to section 244A.
- Immunity from Proceedings (Section 93): As per Section 92, the designated authority shall not initiate any more Actions regarding tax arrears after penalties are paid under the Income Tax Act.
- Refund of Amount (Section 94): Section 91 payment cannot be refunded, If any excess amount was paid by the Declarant previously before submitting; he would get that extra money back but he would not get any interest on it under section 244A according to Income Tax Act.
Conclusions
Vivad se Vishwas Scheme is one of the most important measures for the less complicated settlement of income tax disputes in India. This specified outline has been planned to settle any lakh rupees of pending taxes with no more hidden liabilities or ongoing lawsuits thus reducing both taxpayer and government officers’ workload. In this way, it prompts us to fulfill them more quickly at lower costs because it avoids legal battles altogether fostering a better understanding between taxpayers and tax department officials.
