Commercial’s Direct Tax Vivad Se Vishwas Scheme, 2024 by Ram Dutt Sharma – 1st Edition 2024.

Commercial’s Direct Tax Vivad Se Vishwas Scheme, 2024 by Ram Dutt Sharma – 1st Edition 2024.

About the book

Direct Tax Vivad Se Vishwas Scheme,2024 to Resolve Pending Appeals on Income Tax Dispute (As Amended by The Finance (No. 2) Act 2024. The Income-tax Act, 1961 allows both taxpayers and the Department to file appeals against orders under the Income-tax Act, through various appellate forums like the Joint Commissioner (Appeals), Commissioner (Appeals), Income Tax Appellate Tribunal, High Courts, and the Supreme Court. However, this tax litigation consumes a lot of resources, creates uncertainty and takes away focus away from day-to-day operations, for the taxpayers as well as of tax authorities. To expedite the resolution of appeals, the Direct Tax Vivad Se Vishwas Scheme, 2024 was proposed in the Finance (No. 2) Bill, 2024.

The Hon’ble Union Finance Minister Smt. Nirmala Sitharaman, in her Budget speech on 23.07.2024, said: “While our concerted efforts to reduce the pendency of appeals at various appellate forums are beginning to show good results, it will continue to engage our highest attention.”

The Direct Tax Vivad Se Vishwas Scheme, 2024 has been introduced to expedite the resolution of tax disputes and reduce litigation, following the success of the first scheme launched in 2020. Despite resolving 1.46 lakh cases and recovering Rs. 0.54 trillion, in Vivad Se Vishwas Scheme, 2020, tax appeal pendency has risen again, with over 5.44 lakh cases pending before various appellate authorities, and a total disputed tax amount is at Rs. 10.40 trillion which is roughly 5.6% of India’s GDP. The 2024 scheme, announced in the Finance (No. 2) Bill, 2024, aims to address these growing disputes and provide a more efficient settlement process for taxpayers.

In pursuance of the announcement in Union Budget 2024-25 by Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman, the Central Board of Direct Taxes (CBDT) has notified the Direct Tax Vivad Se Vishwas Scheme, 2024 (referred as DTVSV, 2024) to resolve pending appeals in the case of income tax disputes. The said Scheme shall come into force with effect from 01.10.2024.

The Direct Tax Vivad Se Vishwas Scheme, 2024 was enacted vide Finance (No. 2) Act, 2024. Further, the Rules and Forms for enabling the Scheme have also been notified vide Notification No. 104/2024 in G.S.R 584(E) dated 20.09.2024.

The scheme was brought for the first time in 2020, to facilitate settling direct tax appeals pending till January 31 that year, with the Commissioner of Income-Tax (Appeals), the Income Tax Appellate Tribunal, High Courts, or the Supreme Court. At that time 483,000 appeals were pending, with Rs 4.96 trillion locked in these disputes. Till now, there are 544,000 appeals just before the Commissioner of Income-Tax (Appeals) and the amount of disputed money has ballooned to Rs 10.6 trillion.

The DTVSV Scheme provides for lesser settlement amounts for a ‘new appellant’ in comparison to an ‘old appellant’. The DTVSV Scheme also provides for lesser settlement amounts for taxpayers who file declaration on or before 31.12.2024 in comparison to those who file thereafter.

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