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The Vivad Se Vishwas Scheme, 2024 was announced in the 2024-25 Budget on July 23, 2024, and notified on October 1, 2024.
CBDT has issued a fresh set of FAQs for the Vivad Se Vishwas Scheme, 2024.
Vivad Se Vishwas Scheme 2024: The Income Tax Department has announced that all appeals pending as of July 22, 2024, are eligible for the Vivad Se Vishwas Scheme, 2024, regardless of whether these appeals have been disposed of or withdrawn subsequently.
Filing Declaration Deadline
The Central Board of Direct Taxes (CBDT) has issued a fresh set of FAQs for the Vivad Se Vishwas Scheme, 2024. Taxpayers who wish to take advantage of this dispute resolution scheme must file a declaration by December 31, 2024.
Clarification on Appeals Disposed of After July 22, 2024
The CBDT has clarified that if a taxpayer was eligible for the scheme on July 22, 2024, because the appeal was pending at that time, but the appeal was disposed of before the taxpayer could file a declaration, such cases will still be considered eligible under the scheme. The disputed tax will be calculated as if the appeal has not yet been disposed of.
Equal Opportunity for Taxpayers
Sachin Garg, Partner at Nangia & Co LLP, stated that this clarification provides equal opportunity for taxpayers whose appeals were pending as of July 22, 2024, to settle their cases under the scheme, irrespective of the appeals being disposed of later.
Payment Requirements
To benefit from a reduced rate on the disputed amount, taxpayers need to file the declaration by December 31, 2024. However, the payment of the disputed amount must be made within 15 days of receiving the certificate in Form No. 2 from the tax officer.
Secondary Adjustment Under Transfer Pricing
The second set of FAQs also clarified the applicability of secondary adjustment under transfer pricing for taxpayers availing the Vivad Se Vishwas Scheme, 2024. Secondary adjustment will apply unless the case pertains to the Assessment Year 2016-17 or earlier years when secondary adjustment provisions were not in place.
Intent to Reduce Litigation
The FAQs primarily address uncertainties around eligibility criteria and the computation of payable amounts under the scheme. The goal is to maximize taxpayer participation in the scheme and reduce litigation at both ends.
Overview of the Scheme
The Vivad Se Vishwas Scheme, 2024 was announced in the 2024-25 Budget on July 23, 2024, and notified on October 1, 2024.
Impact of Filing Deadlines on Payment Terms
- If a taxpayer files a declaration by December 31, 2024, they will need to pay 100% of the disputed tax amount, with interest and penalties waived.
- If the declaration is filed on or after January 1, 2025, the taxpayer will need to pay 110% of the disputed tax amount.
