Budget 2024-25 announces New Direct Tax Vivad se Vishwas Scheme, 2024 [Read bill]

The Union Budget 2024-25 has been presented in the Parliament by Finance Minister Nirmala Sitharaman with many proposed amendments

The Indian government is set to introduce a new Direct Tax Vivad se Vishwas Scheme 2024, aiming to streamline the resolution of tax disputes and reduce litigation.

Under the Income-tax Act of 1961, both taxpayers and the Department can appeal orders at various appellate levels, including the Joint Commissioner of Income-tax (Appeals), Commissioner of Income-tax (Appeals), the Income-Tax Appellate Tribunal, High Courts, and the Supreme Court.

The Central Board of Direct Taxes ( CBDT ) has consistently sought to expedite the disposal of appeals. A notable initiative was the Direct Tax Vivad Se Vishwas Act of 2020, which targeted appeals pending as of January 31, 2020.

This scheme had received an overall positive response from taxpayers and significantly increased government revenue.

Despite these efforts, litigation pendency has continued to rise due to the growing number of appeals surpassing disposals. In light of the previous scheme’s success and the increasing backlog of appeals at the Commissioner of Income-tax (Appeals) level, the government has proposed the Direct Tax Vivad se Vishwas Scheme for 2024. This new scheme aims to provide a cost-effective mechanism for settling disputed issues, thereby reducing litigation.

The Budget Document, Finance Bill (2) of 2024 stated , “Clauses 88 to 99 of the Bill seek to insert a new Chapter to provide the Direct Tax Vivad se Vishwas Scheme, 2024.

The Chapter, inter alia, provides––

(a) the definitions of certain expressions relating to “appellant”, “appellant forum”,

“declarant”, “declaration”, “designated authority”, “disputed fee”, “disputed income”,

“disputed interest”, “disputed penalty”, “disputed tax”, “last date”, “specified date” and

“tax arrear”;

(b) the provisions relating to the amount payable by the declarant;

(c) the provisions relating to the particulars to be furnished in the form of declaration;

(d) the provisions relating to the time and manner of payment of tax arrear;

(e) the provisions relating to immunity from initiation of proceedings in respect of

offence and imposition of penalty in certain cases;

(f) the provisions of no refund of amount paid under the Scheme;

204

(g) the provisions relating to benefit, concession or immunity not to apply in other

proceedings;

(h) the provisions relating to the Scheme not being applicable in certain cases;

(i) the provisions relating to the power of the Central Board of Direct Taxes to issue

directions;

(j) the provisions relating to the power of the Central Government to remove

difficulties in giving effect to the provisions of the said Scheme, 2024; and

(k) the provisions relating to the power of the Central Government to make rules for

carrying out the provisions of this Scheme.

This Chapter will take effect from such date as the Central Government may notify.”

The scheme’s implementation date will be announced by the Central Government, along with the final deadline for participation for relief and from pending income tax demands.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates