The Vivad Se Vishwas Scheme 2024 (DTVSV Scheme 2024 or “the Scheme”) presents an opportunity for taxpayers to close long-standing tax disputes, streamlining the resolution process while alleviating litigation burdens. Enacted through Chapter IV (Sections 88 to 99) of the Finance (No 2) Act, 2024, the scheme became effective on October 1, 2024, and offers clearer guidelines and incentives for taxpayers aiming to settle disputes efficiently. The supporting rules and forms were notified in G.S.R 584(E) on September 20, 2024, and the CBDT issued a Guidance Note (Circular No. 12/2024 on October 15, 2024) to clarify eligibility, payment schedules, and the procedural forms required under this scheme. This update emphasizes quick settlement with a focus on simplified processes and meaningful financial incentives.
The Scheme is driven by four primary goals:
Resolve Tax Disputes: To enable taxpayers to settle outstanding disputes with the Income Tax Department without protracted litigation.
Reduce Litigation: To decrease the volume of pending cases in courts and tribunals, improving judicial efficiency.
Encourage Compliance: The Scheme incentivizes taxpayers to settle disputes voluntarily, fostering a compliant tax environment.
Boost Revenue Collection: By facilitating amicable settlements, the Scheme aims to increase revenue collection through reduced litigation.
Section 89 of the Scheme identifies “Appellants” as any party with pending disputes or appeals (writ petitions, Special Leave Petitions) filed by taxpayers or tax authorities. This also includes:
Under the Scheme, eligible arrears include:
For taxpayers to settle disputes under the DTVSV Scheme, payments vary based on the timing and status of the dispute. For example:
| Nature of Arrear | Amount Payable (Before Dec 31, 2024) | Amount Payable (Jan 1, 2025 – Final Date) |
|---|---|---|
| Disputed tax, interest, & penalty | 100% of disputed tax | 110% of disputed tax |
| Disputed interest/fee/penalty | 25% of disputed interest/fee/penalty | 30% of disputed interest/fee/penalty |
Special reductions apply if the appeal was initially filed by tax authorities or if there’s a taxpayer-favorable order unchallenged by a higher authority.
With the 2024 updates, the Vivad Se Vishwas Scheme offers a practical route for taxpayers to resolve disputes and shift focus to growth without the hindrance of unresolved litigation. The Scheme’s incentives, simplified forms, and procedural clarity offer taxpayers an accessible, beneficial way to clear outstanding cases. As awareness of the Scheme increases, it has the potential to significantly impact India’s tax landscape, encouraging compliance and fostering a fairer, more streamlined tax ecosystem.
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