Income Tax: Want to seek relief from the government in tax disputes or outstanding income tax? Please complete this work by 31st December

Income Tax Disputes: How to Avail Vivad Se Vishwas Scheme:The government has introduced ‘Direct Tax Vivad Se Vishwas Scheme 2024’ to settle tax disputes. The main objective of this scheme is to end the pending income tax disputes by settling them in a simple manner. If you want to avail the benefits of this scheme, it is mandatory to apply before December 31, 2024. If you apply after this, you may have to pay additional tax of 10%. If you want to take advantage of this scheme, then it is important to understand every aspect of it thoroughly.

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Objective of Vivad Se Vishwas Scheme

Under this scheme, taxpayers can resolve their tax dispute related matters. The objective of the scheme is to reduce tax disputes and eliminate pending cases. Under the scheme, along with paying the disputed amount of tax, some additional payments will also have to be made, but the penalty and interest will be waived.

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Who can apply?

According to the circular issued by the Income Tax Department on October 15, 2024, such taxpayers can avail the benefits of this scheme:

1. In whose cases appeals are pending till July 22, 2024.

2. In whose cases the objections raised are pending with the Dispute Resolution Panel (DRP) till July 22, 2024.

3. In cases where DRP has given instructions, but the assessment has not been completed till July 22, 2024.

4. Taxpayers who have applied for review under Section 264 and their applications are pending till July 22, 2024.

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How does this scheme work?

Let us understand this with an example. Suppose if according to the tax department your taxable income is Rs 1,50,000 and the tax liability on which is Rs 25,000. But according to you, taxable income should be Rs 1,00,000 and tax liability should be Rs 10,000, which you have already paid. To settle this dispute, you will have to pay the remaining Rs 15,000 (Rs 25,000 – Rs 10,000) and some extra. But penalty and interest will not have to be paid. This facility will be available only if you apply by December 31, 2024. But, if you apply after January 1, 2025, you will have to pay 110% of the disputed tax.

Taxpayers are divided into two categories under the scheme:

1. New Appellants: Those whose cases were registered after February 1, 2020.

2. Old Appellants: Those whose cases were pending till January 31, 2020.

Taxpayers making new appeals will have to pay 100% of the disputed tax if they apply by December 31, 2024, while if they apply after January 1, 2025, they will have to pay tax equal to 110% of the disputed tax. At the same time, taxpayers making old appeals will have to pay 110% of the disputed tax if they apply by December 31, 2024 and 120% of the disputed tax if they apply after January 1, 2025.

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Who will benefit from this scheme?

The Direct Tax Vivad Se Vishwas Scheme 2024 may be particularly beneficial for taxpayers falling in the following categories:

1. Whose basis of appeal is weak and the chances of success in the appeal are less.

2. Those who do not have sufficient documents to support their claim.

3. In cases where the disputed amount of tax is less.

4. Those who want to save time and money spent on tax disputes.

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In which cases will the scheme not be applicable?

This scheme will not be applicable in these special cases:

• Search and seizure cases.

• Cases of undisclosed income or assets abroad.

• Processes issued under other special laws.

• Disputes related to wealth tax, security transaction tax, commodity transaction tax and equalization levy.

Keep these things in mind also

It should also be kept in mind that the declarations submitted under the scheme will not be considered as a basis for any other dispute in future. If a taxpayer has paid excess tax, interest, or penalty, it will be refunded but no interest will be paid on it.

Necessary forms related to the scheme

There are four different forms available for application under the scheme:

1. Form 1: For declaration and undertaking.

2. Form 2: For certificate by the authorized officer for the scheme.

3. Form 3: To provide payment information.

4. Form 4: For full and final settlement of disputed tax.

These forms can be submitted electronically on the Income Tax Department website www.incometax.gov.in.

Opportunity to end tax dispute

Overall, ‘Direct Tax Vivad Se Vishwas Scheme 2024’ is a golden opportunity for those taxpayers who want to end tax related disputes. By applying by December 31, 2024, such taxpayers can not only avoid extra tax but can also end long-running disputes.