A major update to the Direct Tax Vivad Se Vishwas Scheme, 2024 was made to provide relief to a large number of left out taxpayers who could not otherwise apply for this scheme due to certain specified situations. In an order dated January 20, 2025 the Ministry of Finance has removed ‘the difficulties’ which arose due to certain situations and provided relief to taxpayers who wanted to apply for the Vivad Se Vishwas Scheme but could not do so earlier.
With these difficulties now being removed, more taxpayers would be able to settle their pending income tax disputes by applying for the Vivad Se Vishwas Scheme, 2024. This scheme, announced in Budget 2024 is aimed at closing the pending income tax dispute cases as the government forgoes the interest and penalty amount if the taxpayer pays the disputed amount of income tax. However, note you have time till January 31, 2025 to pay a lower amount of disputed tax (100%). From February 1, 2025 you would need to pay 110% of the disputed tax amount to apply for Vivad Se Vishwas Scheme.
The situations which prevented a taxpayer from applying for Vivad Se Vishwas Scheme According to the order here are the situations: “while implementing the said Scheme difficulties have arisen in situations where:
An order in case of a person had been passed on or before the specified date i.e. the 22nd day of July, 2024;2. The time for filing an appeal in respect of such order was available as on the said date; Appeal in respect of such order was filed after the said date within the stipulated time as applicable for filing of such appeal; and Aforesaid appeal is filed without any application for condonation of delay; G V Gopala Rao, Director of Tax Advisory, Fox Mandal & Associates LLP and retired Chief Commissioner of Income Tax, Mumbai said, “The Direct Tax Vivad se Vishwas Scheme, 2024, provides for dispute resolution in respect for pending income tax litigation. The objective of the scheme is to reduce pending income tax litigation, generate timely revenue for the Government and benefit the taxpayers by providing them peace of mind.”
What is the new update to Vivad Se Vishwas Scheme 2024? If below four conditions are satisfied, a taxpayer who was earlier ineligible will now become eligible to apply for Vivad Se Vishwas Scheme.
According to the order here are the details:
An order in case of a person had been passed on or before the specified date i.e. the 22nd day of July, 2024; The time for filing an appeal in respect of such order was available as on the said date; Appeal in respect of such order was filed after the said date within the stipulated time as applicable for filing of such appeal; and Aforesaid appeal is filed without any application for condonation of delay; The Finance Ministry said in the order: “The Central Government hereby makes the following Order to remove the difficulty, namely:
In the case of such a person, aforesaid appeal shall be considered as pending as on the 22nd day of July, 2024 for the purposes of the said Scheme; Such a person shall be considered as an appellant for the purposes of the said Scheme; In such a case, disputed tax shall be calculated on the basis of such appeal; and The provisions of the said Scheme and the rules framed thereunder shall apply accordingly in such a case.” “In simple words an assessee, in whose case an order was passed on or before July 22, 2024, and who filed an appeal within the due date (i.e., without condonation), would now be eligible for the VSV Scheme,” says Deepak Chopra, direct tax committe chairman, Karnataka State Chartered Accountants Association (KSCAA).
These taxpayers will now become eligible to apply for Vivad Se Vishwas Scheme 2024 Rao from Fox Mandal & Associates LLP says: “Section 89 of the Direct Tax Vivad Se Viswas Scheme, 2024, provides for the definition of an “appellant” who is eligible for the said scheme. As per the scheme in a case where a person in whose case an appeal has been filed before an appellate forum and such appeal is pending as on the specified date i.e. 22/07/2024 is only eligible. However, in a case where the person in whose case an order was passed on or before the specified date and against the said order an appeal was preferred (within the stipulated time and without applying for condonation of delay) after the specified date was not covered. Accordingly, to remove such difficulty, the CBDT has issued an order to make such cases eligible to avail the benefit of the scheme. Thus, the CBDT made following modifications to remove the above said difficulty:
In the case of such
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