• Notification Date: 23-09-2024
• Notification No:

CBDT Launches - The Direct Tax Vivad Se Vishwas Scheme in 2024

The scheme is set to come into operation on October 1, 2024.

The Central Board of Direct Taxes (CBDT) has officially announced the Direct Tax Vivad se Vishwas Yojana (DTVSV) 2024, which is scheduled to start from October 1, 2024. This scheme focuses on resolving pending income tax disputes and was introduced under the Union Budget 2024-25 by Finance Minister Nirmala Sitharaman, as reported by the Ministry of Finance in its press release.

It appears that DTVSV 2024 will provide relief for new appellants by offering lower settlement amounts compared to those applicable to previous appellants. Additionally, the press release noted that taxpayers who file declarations before December 31, 2024 will enjoy a reduction in settlement amounts.

The Ministry of Finance specified that to implement the scheme, four specific forms have been notified as follows:

Form-1: Declaration and undertaking by the declarant.
Form-2: Certificate issued by the Designated Authority.
Form-3: Intimation of payment by the declarant.
Form-4: Order for full and final settlement of tax dues.

Form-1 must be filed separately for each dispute, except in cases where both the appellant and the income tax authority have filed against the same order. In such cases, the appellant is allowed to file a single Form-1. Payment notifications are to be submitted using Form-3, along with evidence of withdrawing any additional payment notifications on hold.

The income tax e-filing portal will also provide Forms 1 and 3 for electronic filing.

More detailed provisions of the DTVSV Scheme, 2024 can be found in sections 88 to 99 of the Finance (No. 2) Act, 2024, and through the Direct Tax Vivad Se Vishwas Yojana (DTVSV), 2024.

"The Vivad se Vishwas scheme will be operational from October 1, 2024," stated the notification from the Ministry of Finance. The scheme will allow taxpayers to settle their tax disputes.

The new scheme builds on the positive response to the first edition, launched in 2020. "The central government hereby assigns the 1st day of October 2024 as the date on which the Direct Tax Vivad Se Vishwas Scheme (DTVSV) 2024 shall come into force," read the notification.

The initial launch of the 'Vivad se Vishwas' scheme in 2020 saw over 1 lakh taxpayers participate, helping the government collect around Rs 75,000 crore in taxes. According to Karishma R. Phatarphekar, Partner at Deloitte India, foreign companies may now need to reconsider their existing and future domestic tax disputes, not only from a cost-benefit perspective but also in light of the 10% increase in tax payment rates starting from January 1, 2025.

The success or failure of DTVSV 2024 will depend largely on how well it is implemented. The Income Tax Department’s field formations will need to work closely with experts in a bottom-up manner for the scheme to achieve its intended goals.

While DTVSV 2024 shares some characteristics with amnesty schemes—such as waiving fines and penalties, targeting a specific audience, and raising funds—its primary objective is to resolve tax disputes quickly. The outcome of this scheme will depend on its implementation and its long-term impact on tax compliance and culture in India.