The government will launch the Direct Tax Dispute Resolution Scheme Vivaad se Vishwas 2.0 from October 1. Vivaad se Vishwas Scheme 2.0 was originally announced in the Budget 2024-25 presented in July to resolve certain pending income tax disputes. The Finance Ministry said that the Central Government fixes October 1, 2024 as the date for implementation of the Direct Tax Vivaad se Vishwas Scheme 2024.
Disputes continue at various legal forums over 2.7 crore direct tax demands amounting to about Rs 35 lakh crore. Finance Minister Nirmala Sitharaman had said in her budget speech that the government will continue its effort to simplify taxes, improve taxpayer services, provide tax certainty and reduce litigation while increasing revenue. The government brought the first phase of the Vivaad se Vishwas scheme for cases under direct taxes in 2020. About one lakh taxpayers availed the scheme and the government received taxes of about Rs 75,000 crore.
This scheme was started so that the tax matter can be settled at the tax forum itself instead of going to the court. If the case is in court, it can drag on for a long time. Apart from causing mental trouble to the taxpayer, this can also affect the business. The tax department gives exemption from interest and penalty in this and only the amount of the disputed tax has to be paid. By sitting together and resolving the matter, trust increases between the taxpayer and the administration and there is an opportunity to avoid court proceedings. Those who want to take advantage of this scheme have to make the payment by the prescribed date.
In this scheme, the taxpayer has to pay only the disputed tax. No interest or penalty is levied by the tax department on this amount. The identity of the taxpayer who takes advantage of this scheme is not revealed by the government. From time to time, the duration of this scheme has been extended so that more cases can be settled. Businessmen are also included in this case, who can settle their tax disputes. Whatever amount is decided under the scheme, a fixed date is kept for it by which the taxpayer has to pay the money. If a case of less than Rs 5 crore is caught in the raid, then the benefit of this scheme can be availed. However, if the case is going on in the court and the punishment has been announced, then the benefit of the Vivaad se Vishwas scheme cannot be availed.
