Vivad Se Vishwas Scheme, 2024

About the scheme

• The scheme is initiated by Government of India to settle disputes pending as on July 22, 2024, under the Income-tax laws.
• Under this, a taxpayer can settle the eligible disputes by making payment of the amounts, as determined by the Designated Authority as per the 2024 Scheme.

Purpose of the scheme

• To reduce pending litigation.
• To generate revenue for the Govt.
• To get relief from pending dispute by paying disputed tax and get waiver from payment of interest and penalty and prosecution.

Why should the taxpayer contemplate this Scheme ?

1. Significant savings: The Scheme provides for waiver of interest, penalty and prosecution. In disputes involving penalty, interest or fine, only partial amounts need to be paid. This will also have a bearing on the ongoing cost of litigation.
2. Focus on core areas: Frees the management from allocating time and resources towards ongoing disputes and allows organisations to focus on strategic business matters.
3. Flexibility: The Scheme provides taxpayers with the option to choose the years of payment (even if the dispute is pending at the behest of the tax authorities), without creating a precedent.

Amount payable to settle the dispute

Note: Where an appeal or writ or SLP is filed by the tax authority on any issue is to be settled, amount payable shall be 50% of the amount in the above table, calculated on such issue, in the prescribed manner.

Where an appeal or objections filed by the taxpayer is to be settled, if the taxpayer has already got a decision on any issue in its favor by the appellate authority or the HC and the same has not been reversed by any higher authority or court, it is proposed that the amount payable shall be reduced to 50% of the amount in the above table.

Pre-requisite for entitlement

• Appeals / writ petition / SLP relating to disputed tax, interest, penalty or fee is pending before the Appellate authorities / High Court / Supreme Court
• Objections are filed before the Dispute Resolution Panel (DRP) and the DRP is yet to issue directions
• The DRP has issued directions, however, the tax authority is yet to pass an assessment order in conformity with such directions.
• The revision application is filed by the taxpayer before the Commissioner.

Amount payable as disputed tax

Where settlement results in reduction of Minimum Alternate Tax (MAT)/Alternate Minimum Tax (AMT) credit or losses or depreciation, the taxpayer can opt for either of the following:

• Include tax related to reduction of MAT/AMT credit or loss or depreciation in the disputed tax; or
• Carry forward the reduced MAT/AMT credit or loss or depreciation (as may be prescribed) without payment of disputed tax.

Other points

• The resolution process can be completed within a month, bringing an expeditious end to protracted disputes.?
• It also covers disputes relating to taxes determined under the provisions relating to TDS and TCS.
• Ineligible persons / cases:

? Where assessment or reassessment has been made on the basis of search.

? Where prosecution has been instituted.

? Any undisclosed income from a source located outside India or undisclosed asset located outside India.

? An assessment/reassessment made basis information received pursuant to tax information exchange agreements.

? Detention order is passed under The Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974.

? Convicted of any offence punishable under Bharatiya Nyaya Sanhita, 2023.

? A person notified under section 3 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992.

KGS Comments

• It’s a welcome move as the Govt is giving an opportunity to settle all pending disputes and providing assessee peace of mind by giving them the opportunity to end the dispute and availing relief from interest, penalty and prosecution.
• Those disputes which were pending in the 2020 scheme are also within its ambit.

How we can help you !

Eligibility Assessment: We can help you evaluate whether you qualify for this scheme, based on your specific case and nature of the tax dispute.

Application Preparation: We can help in preparing and filing the necessary forms and documentation required to apply for the scheme, ensuring compliance with all requirements.

Determination of the amount involved: We can calculate the amount due and determine the potential benefits and advice whether its worthwhile to go for the scheme.

Negotiation and Settlement: We can negotiate with tax authorities on behalf of their clients to settle disputes and agree on the terms of the settlement.

Compliance and Documentation: We assist in ensuring that all compliance requirements are met and that documentation is correctly maintained and submitted.

Representation and follow ups: We can represent you during meetings or proceedings with tax authorities, ensuring that your interests are well-represented.

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