The Central Board of Direct Taxes (CBDT) has officially notified the launch of the “Direct Tax Vivad Se Vishwas Scheme” under the Finance No. 2 Act, 2024. This scheme, announced during the 2024 budget by Union Finance Minister Nirmala Sitharaman, aims to expedite the resolution of income tax disputes. The new initiative is scheduled to be implemented across the country from October 1, 2024.
This scheme is part of the government’s continuous efforts to reduce litigation and settle tax-related issues efficiently. It is designed to offer a structured and simplified approach for taxpayers to settle pending disputes.
Simple Forms and Clear Guidelines Issued
To make the process straightforward for taxpayers, CBDT has introduced four simple forms under the scheme. These forms aim to simplify the process of declaring disputes, providing payment details, and getting certification of final settlement. Here’s a breakdown of the forms:
- Form 1: Used for filing a declaration and providing an undertaking. This form will be the first step for any taxpayer willing to settle their disputes under this scheme.
- Form 2: This is for the designated authority to issue a certificate that acknowledges the taxpayer’s participation in the scheme.
- Form 3: Taxpayers will use this form to provide payment details. It is also used to submit details of withdrawal of appeals or cases from higher authorities.
- Form 4: This will be used by the designated authority to issue an order certifying the full and final settlement of the tax arrears.
All forms must be submitted through the Income Tax Department’s e-filing portal (www.incometax.gov.in).
Key Highlights of the Scheme
One of the major features of the Vivad Se Vishwas Scheme 2024 is the incentive for early filing. Taxpayers who submit their declarations by December 31, 2024, will benefit from a lower settlement amount compared to those filing later. This deadline encourages taxpayers to act quickly to benefit from this financial advantage.
Moreover, each dispute must be filed separately using Form 1, unless both the appellant and the Income Tax Authority have filed appeals for the same order. In such cases, a single Form 1 can be used.
The settlement amount will differ based on the time of filing. The scheme offers a fair opportunity for taxpayers who wish to resolve their disputes without prolonged legal processes, saving both time and resources.
Aimed at Reducing Litigation
The Vivad Se Vishwas Scheme is intended to reduce the burden of ongoing tax litigation in the country. Direct tax disputes often take years to resolve, creating uncertainty and financial strain for both the government and taxpayers. This scheme, popularly referred to as “Vivad Se Vishwas Yojana 2.0,” is designed to address these pending disputes efficiently.
This initiative follows the success of the first phase of the Vivad Se Vishwas scheme, which was launched a few years ago and settled a significant number of tax-related cases. The government has taken this forward with improved provisions and a focus on encouraging more taxpayers to take part in the scheme.
According to the rules, once the forms are submitted and payments made, taxpayers will receive a confirmation of full and final settlement, ensuring that their disputes are resolved, and no further legal proceedings will arise.
Encouraging Early Compliance for Taxpayers
To encourage taxpayers to comply early, the scheme sets a distinction between those who file before and after December 31, 2024. While the exact settlement amount may vary, early filers are likely to enjoy better terms than those who delay. The scheme thus incentivizes timely action to avoid unnecessary costs or complications.
Moreover, the CBDT has ensured that the online submission of forms is user-friendly. With a dedicated platform on the Income Tax Department’s website, the filing process is streamlined to avoid any unnecessary bureaucratic hurdles.
Simplified Path for Settling Tax Disputes
The Vivad Se Vishwas Scheme 2024 is a progressive step towards resolving tax disputes that have been stuck in the system for years. It not only speeds up the process but also reduces the burden on the legal system, providing taxpayers with a fair chance to settle their cases.
By providing clear forms and guidelines, the government ensures that even complex tax disputes can be resolved in a transparent and simplified manner. This scheme promises to reduce litigation and offer quicker resolutions, making the tax system more efficient and taxpayer-friendly.
