Relief for more taxpayers in Vivad Se Vishwas Scheme: Govt removes these four difficulties in applying for closure of income tax dispute cases
A major update to the Direct Tax Vivad Se Vishwas Scheme, 2024 was made to provide relief to taxpayers who could not otherwise apply for this scheme due to four specified situations. In an order dated January 20, 2025 the Ministry of Finance has removed ‘the difficulties’ which arose due to four specified situations and thereby provided relief to taxpayers who wanted to apply for the Vivad Se Vishwas Scheme but could not do so earlier.#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;}
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With these four difficulties now being removed, more taxpayers would be able to settle their pending income tax disputes by applying for the Vivad Se Vishwas Scheme, 2024. This scheme, announced in Budget 2024 closes the pending income tax dispute case and the government forgoes the interest and penalty amount if the taxpayer pays the disputed amount of income tax. However, note you have time till January 31, 2025 to pay a lower amount of disputed tax (100%) as from February 1, 2025 you need to pay 110% of the disputed tax amount to apply for Vivad Se Vishwas Scheme.
Which four situations have been amended to help taxpayers?
According to the order here are the four situations: “while implementing the said Scheme difficulties have arisen in situations where:An order in case of a person had been passed on or before the specified date i.e. the 22nd day of July, 2024;2.The time for filing an appeal in respect of such order was available as on the said date;Appeal in respect of such order was filed after the said date within the stipulated time as applicable for filing of such appeal; andAforesaid appeal is filed without any application for condonation of delay;
“Section 98 of the said Finance (No.2) Act, 2024 provides that if any difficulty arises in giving effect to the provisions of the Scheme, the Central Government may, by Order, not inconsistent with the provisions of the Scheme, remove the difficulty; NOW THEREFORE, in exercise of the powers conferred by sub-section (1) of section 98 of the Finance (No.2) Act, 2024, the Central Government hereby makes the following Order to remove the difficulty,” said the Ministry of Finance in the order.
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What is the new update to Vivad Se Vishwas Scheme 2024?
According to the order here are the details:Situation 1: An order in case of a person had been passed on or before the specified date i.e. the 22nd day of July, 2024
New update: (i) in the case of such a person, aforesaid appeal shall be considered as pending as on the 22nd day of July, 2024 for the purposes of the said Scheme.Situation 2: The time for filing an appeal in respect of such order was available as on the said date
New update: (ii) such a person shall be considered as an appellant for the purposes of the said Scheme.Situation 3: Appeal in respect of such order was filed after the said date within the stipulated time as applicable for filing of such appeal
New Update: (iii) in such a case, disputed tax shall be calculated on the basis of such appeal.Situation 4: Aforesaid appeal is filed without any application for condonation of delay
New update: (iv) the provisions of the said Scheme and the rules framed thereunder shall apply accordingly in such a case.“With this new order, now more taxpayers are eligible to apply for Direct Tax Vivad Se Vishwas Scheme, 2024. As per this order now if an appeal against any order is filed without any application for condonation of delay then the rules of Vivad Se Vishwas Scheme, 2024 shall apply. Main beneficiary will be those whose order was passed before 22 July 2024 but the time limit for filing appeal was available for them and they had filed the appeal within the time limit.,” says chartered accountant Ashish Niraj, partner, A S N & Company.
Mihir Tanna, associate director, S.K Patodia LLP, says, "Eligibility for VSV depends on pendency of appeal as on 22nd July 2024 (we can say eligibility date). However, if order is passed on or before eligibility date and appeal is filed after eligibility date; still they will be available for VSV if appeal is filed on time as per notification dated 20th Jan 2025."
Which appeals are covered under Direct Tax Vivad Se Vishwas Scheme, 2024 ?
According to an Income Tax Department circular dated October 15, 2024, here are the details:a person in whose case an appeal or a writ petition (WP) or special leave petition (SLP) has been filed either by him or by the income-tax authority or by both, before an appellate forum and such appeal or petition is pending as on the specified date i.e. 22.7.2024; ora person who has filed his objections before the Dispute Resolution Panel (DRP) under section 144C of the Income-tax Act, 1961 ('the Act') and the DR? has not issued any direction on or before 22.7.2024; orA person in whose case the DRP has issued direction under section 144C(5) of the Act and the AO has not completed the, assessment under section 144C(13) on or before 22.07.2024A person who has filed an application for revision under section 264 of the Act and such application is pending as on 22.7.2024Table showing the amount of tax to be paid for applying for Vivad Se Vishwas Scheme, 2024
Serial Number
Nature of tax arrears
Amount payable where declaration made on or before January 31, 2025
Amount payable where declaration made on or after February 1, 2025& before last date
1.
Tax arrears include disputed tax, interest, penalty (New appellant)
100% of disputed tax
110% of disputed tax
2.
Tax arrears include disputed tax, interest, penalty (Old appellant)
110% of disputed tax
120% of disputed tax
3.
Tax arrears related to disputed interest/penalty/fee (New appellant)
25% of disputed interest/penalty/fee
30% of disputed interest/penalty/fee
4.
Tax arrears related to disputed interest/penalty/fee (Old appellant)
30% of disputed interest/penalty/fee
35% of disputed interest/penalty/fee
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This story originally appeared on: India Times - Author:Faqs of Insurances
