Government Launches Direct Tax Vivad Se Vishwas Scheme to Resolve Tax Disputes

The Ministry of Finance has announced the Direct Tax Vivad Se Vishwas Scheme, 2024, effective October 1. The scheme aims to resolve pending income tax disputes, offering reduced settlement amounts and incentivizing early engagement. Key forms for declaration, payment, and settlement have been introduced for a smooth process.

The Ministry of Finance has officially launched the Direct Tax Vivad Se Vishwas Scheme, 2024 (DTVSV, 2024), as earlier announced by Union Minister for Finance and Corporate Affairs Nirmala Sitharaman during the Union Budget 2024-25. Effective from October 1, this scheme aims to resolve pending income tax disputes efficiently.

The scheme offers reduced settlement amounts for 'new appellants' compared to 'old appellants,' encouraging taxpayers to engage early. Additionally, further reductions are available for declarations filed before December 31, 2024, incentivizing timely resolution.

Rules and forms for the scheme were issued on September 20. Four forms—Form-1 for declarations, Form-2 for certificates, Form-3 for payment intimation, and Form-4 for final settlement—were introduced. Taxpayers must file Form-1 separately for each dispute, with a single Form-1 sufficing where both appellant and authority have filed appeals on the same order.

After making a payment, taxpayers need to submit Form-3 and evidence of withdrawing any related legal petitions. Forms 1 and 3 must be filed electronically through the Income Tax Department's e-filing portal, ensuring a digital-first approach for ease of use and accessibility.

The DTVSV Scheme, 2024, underscores the government's commitment to reducing tax litigation, easing the judicial system's burden, and fostering a more taxpayer-friendly environment.