Vivad Se Vishawas Scheme 2024: Income Tax Department releases new FAQs on eligibility, tax amount payable

Vivad Se Vishawas Scheme 2024: Income Tax Department releases new FAQs on eligibility, tax amount payable; Check details here

The Income Tax Department has released new frequently asked questions (FAQ) about Direct Tax Vivad Se Vishawas (DTVSV) Scheme 2024. This scheme (announced in Budget 2024) is useful for those taxpayers who want to settle their pending income tax disputes with the Income Tax Department by paying the disputed tax amount as well as a specified percentage additionally of it. The tax department will waive off all the interest and penalties which are additionally imposed to close the dispute.

“The objective of the Scheme is to, inter alia, reduce pending income tax litigation, generate timely revenue for the Government and benefit taxpayers by providing them peace of mind, certainty and savings on account of time and resources that would otherwise be spent on the long-drawn and vexatious litigation process,” said the Income Tax Department in a circular dated December 16, 2024.

Here are the FAQs released by the Income Tax Department on eligibility, computation of tax payable amount, Prosecution and other queries that taxpayers may have regarding Vivad Se Vishwaas Scheme.

Eligibility under Direct Tax Vivad Se Vishwas Scheme 2024

1. Suppose a taxpayer is eligible for DTVSV Scheme, 2024 as his appeal is pending as on 22.7.2024. But subsequently, before the taxpayer could file a declaration under the DTVSV Scheme, 2024, his appeal has been disposed off on merits or dismissed as withdrawn for the purposes of the Scheme. Can such a taxpayer still file declaration under the Scheme?

Yes, such cases are eligible for settlement under the Scheme as appeal was pending as on 22.7.2024. Disputed tax will be calculated in the same manner as if appeal pending as on 22.7.2024 is yet to be disposed off.

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2. Suppose a taxpayer has filed a declaration in Form-I. After the declaration, the appeal has been disposed off by the concerned authority. Whether such a case is eligible for settlement?
Yes, such a case is eligible for settlement.

3. Time limit for filing of appeal has expired before 22nd July 2024 but an appeal along with application for condonation. of delay has been filed after 22nd July, 2024. Whether the taxpayer can opt for the Scheme in such a case?

No. Appeal has to be pending as on 22nd of July, 2024 for a taxpayer to opt for the Scheme. Thus, where an appeal along with application for condonation is filed after 22nd July, 2024, it does not tantamount to pendency of appeal as on 22nd July, 2024. Accordingly, such cases shall not be eligible.

Computation of amount payable under Direct Tax Vivad Se Vishwas Scheme 2024

4. The DTVSV Scheme, 2024 provides for the different rates where declaration is filed on or before 31.12.2024 and where it is filed on or after 1.1.2025. Please clarify whether payment of disputed amounts is also required to be made before 31. 12. 2024 for applicability of lower rate?

Ans: Reference may be made to the provisions of the Scheme read with DTVSV Rules, 2024. As per Rule 3 of DTVSV Rules, 2024, the amount payable is linked to the date of filing of declaration. Accordingly, where declaration is filed on or before 31.12. 2024, the amount payable by the declarant shall be as mentioned in column (3) of the Table specified in section 90 of the Finance Act, 2024. However, where a declaration is filed on or after 1.1.2025, the amount payable by the declarant shall be as mentioned in column (4) of the said Table.

5. Whether any additional ground filed in relation to an appeal is to be considered while computing disputed tax?

If any additional ground has been filed on or before 22nd July 2024, it shall be considered for the purpose of computing disputed tax.

Disputed Penalty under Direct Tax Vivad Se Vishwas Scheme 2024

6. Suppose in a case, the additions made in assessment have reached finality. There is no quantum appeal pending as on 22nd July, 2024. However, penalty appeal is pending as on 22nd July, 2024 which relates to the additions made in the said assessment order. Can a penalty appeal be settled independent of quantum appeal?

Penalties which are unrelated to quantum additions are clearly eligible for settlement where an appeal in respect of such penalty is pending as on 22nd July 2024. These penalties are unrelated to quantum additions and therefore can be settled independent of quantum appeals.

Further, where the additions made in an assessment have reached finality and thus there is no quantum appeal pending as on 22nd July, 2024, there is no disputed income or disputed tax as on the specified date i.e. 22nd July, 2024. Therefore, such penalty can be settled separately under the Scheme as per SI. No. (c ) & (d) of the Table in Section 90 of the Scheme.

This story originally appeared on: India Times - Author:Faqs of Insurances