Want to resolve tax dispute? Avail this scheme before year-end
The Direct Tax Vivad Se Vishwas Scheme, announced in Budget 2024, is a government scheme to resolve pending tax disputes. Under the scheme, taxpayers can settle their disputes with the Income Tax Department by paying the disputed tax amount and an additional specified percentage on it. To avail of this scheme, one must deposit the calculated tax amount before December 31.
Benefits and eligibility criteria
On successful submission of the requisite tax amount and application form, the IT Department will waive all other penalties and penal interest charges. The department has specified certain eligibility criteria for this scheme in a circular dated October 15, 2024. These include persons with pending appeals/petitions before an appellate forum as on July 22, 2024, and persons who have filed an application for revision under section 264 of the IT Act and such application is pending as on July 22.
Scheme's objective and expert insights
The Direct Tax Vivad Se Vishwas Scheme seeks to simplify resolution of pending income tax disputes, minimize litigation, and offer financial relief. CA Mihir Tanna detailed how the scheme works with a hypothetical scenario. He stressed that penalties and interest under section 220 would be waived off if taxpayer's application is approved under this scheme. However, he also warned that taxpayers who deposit their tax amount and submit Form 1 on/after January 1, 2025 will have to pay higher sum.
