The Central Board of Direct Taxes (CBDT) has notified rules and forms of the Direct Tax Vivad Se Vishwas Scheme (DTVSV) 2024 to resolve pending appeals in income tax disputes. The scheme, announced in Union Budget 2024-25 by Union Minister of Finance Nirmala Sitharaman will be effective from October 1, 2024.
What Is Direct Tax VSV 2.0?
Under the VSV 2.0 scheme, taxpayers with direct tax appeals pending before a commissioner, tribunal, high court, or the Supreme Court can settle the dispute by paying the full tax amount and waiving the interest and penalties. The scheme only applies to cases where the taxpayer has filed an appeal. It excludes certain cases, such as search cases, prosecution cases, and undisclosed foreign income or assets.
“The DTVSV Scheme provides for lesser settlement amounts for a ‘new appellant’ in comparison to an ‘old appellant’. The DTVSV Scheme also provides for lesser settlement amounts for taxpayers who file declaration on or before December 31, 2024 in comparison to those who file thereafter,” the CBDT said in a release.
For cases involving disputed tax and related interest or penalty, if the appeal was filed after January 31, 2020, but on or before January 31, 2024, 100 per cent of the disputed tax must be paid. After January 31, 2024, the amount increases to 110 per cent of the disputed tax. For appeals pending as of July 22, 2024 at the same forum, but filed on or before January 31 2020, the payment is 110 per cent of the disputed tax.
For cases involving disputed interest, penalty, or fee, if the appeal was filed after January 31, 2020, 25 per cent of the disputed amount must be paid. If the appeal was filed after January 31, 2024, the payment increases to 30 per cent of the said amount.
Forms And Rules Notified
Four separate forms have been notified for the purposes of the DTVSV Scheme. They are as follows.
§ Form-1: Form for filing declaration and undertaking by the declarant
§ Form-2: Form for certificate to be issued by the designated authority
§ Form-3: Form for intimation of payment by the declarant
§ Form-4: Order for full and final settlement of tax arrears by designated authority
DTVSV requires separate filing of Form-1 for each dispute. If both the appellant and the income tax authority file an appeal for the same order, a single Form-1 has to be filed. Intimation of payment is to be made in Form-3 to designated authority along with proof of withdrawal of appeal, objection, application, writ petition, special leave petition, or claim, the CBDT said in the release. Forms 1 and 3 should be submitted electronically, which will be made available on the e-filing portal of the income tax department.
