Budget 2024-25: FM Proposes Vivad Se Vishwas Scheme 2024 For Settling Income Tax Disputes Pending In Appeal

The Union Finance Minister Nirmala Sitharaman has proposed Vivad Se Vishwas Scheme 2024 for settling income tax disputes pending in appeal.

The Finance Minister has also proposed that the monetary limit for filing of appeals to Tribunals, High Courts and Supreme Courts by the tax authorities in respect of direct tax, excise and service tax has been increased to Rs. 60 Lakhs, Rs. 2 crores and Rs. 5 Crores respectively.

The benefit of the Vivad Se Vishwas Scheme 2024 can be availed by taxpayers in cases where appeals/writ petition/special leave petition (SLP) relating to disputed tax, interest, penalty or fee is pending before the appellate authorities/High Court/Supreme Court.

The benefit of the scheme will also be extended to the cases where the objections are filed before the Dispute Resolution Panel and the DRP is yet to issue directions. In the cases where, DRP has issued directions, however, the tax authority is yet to pass an assessment order in conformity with such directions.

The Vivad Se Vishwas Scheme 2024 can be opted by the taxpayers even in the case where a revision application is filed by the taxpayer before the Commissioner.

The Vivad Se Vishwas Scheme 2024 shall not be applicable in cases where the assessment was carried out based on a search, assessment year in respect of which prosecution has been instituted on or before the date of filing of declaration, undisclosed income from a souce located outside India.

The benefit of the scheme shall not be available to the any person in respect of whom prosecution for any offence punishable under the provisions of the Unlawful Activities (Prevention) Act, 1967, the Narcotic Drugs and Psychotropic Substances Act, 1985, the Prohibition of Benami Property Transactions Act, 1988, the Prevention of Corruption Act, 1988, the Prevention of Money- Laundering Act, 2002, has been instituted on or before the filing of the declaration or person has been convicted.

In case the scheme availed on or before December 31, 2024 in respect of the appeal filed for the period before January 31, 2020 only the disputed tax plus 10% of the disputed tax will be payable, however if the scheme is availed on or after January 1, 2025, the taxpayer has to pay 20% of disputed tax in addition to the Disputed tax.

In case the scheme availed on or before December 31, 2024 in respect of the appeal filed for the period after January 31, 2020 but on or before July 22, 2024 only the 25% of disputed interest or penalty will be payable, however if the scheme is availed on or after January 1, 2025, the taxpayer has to pay 30% of disputed interest or penalty.

In case the scheme availed on or before December 31, 2024 in respect of the appeal filed for the period on or before January 31, 2020 but on or before July 22, 2024, only the 30% of disputed interest or penalty will be payable, however if the scheme is availed on or after January 1, 2025, the taxpayer has to pay 35% of disputed interest or penalty.

In case the scheme availed on or before December 31, 2024 in respect of the appeal filed for the period between January 31, 2020 to July 22, 2024 only the disputed tax will be payable, however if the scheme is availed on or after January 1, 2025, the taxpayer has to pay 10% of disputed tax in addition to the Disputed tax.

It is noteworthy that the settlement amounts payable to be reduced to 50% in two cases. First, where an appeal/ writ/ Special Leave Petition is filed by the tax department. Second, where the issue is covered by a favourable decision of ITAT/ High Court in the assessee's own case.