Vivad Se Vishwas Scheme 2024 Expands Eligibility for Taxpayers to Resolve Income Tax Disputes

The Vivad Se Vishwas scheme has undergone significant changes. The Indirect Tax Vivad Se Vishwas Scheme, 2024, now includes more taxpayers to help resolve pending income tax disputes. The Finance Ministry identified four situations where many were initially excluded. An order from January 20, 2025, allows more taxpayers to settle disputes by paying a specified portion of the disputed tax without extra interest or penalties.

Taxpayers must pay 100% of the disputed tax to benefit from this scheme. If they miss the deadline, the amount increases to 110%. The four issues involved the timing and procedure for filing appeals against tax orders. Problems arose when an order was issued before July 22, 2024, but the appeal was filed within the allowed timeframe after this date without seeking condonation of delay.

The Ministry's order clarifies that appeals filed in these circumstances will be considered pending as of July 22, 2024. This makes those taxpayers eligible for the scheme. Initially, only cases with appeals pending as of July 22, 2024, were eligible. This excluded taxpayers who received orders before this date but had not yet filed appeals. The new order rectifies this by stating that if an appeal is filed within the prescribed timeframe, such taxpayers can now apply for the scheme.

Tax professionals have emphasized the importance of this update. They noted that it resolves significant disparities and discrimination against some taxpayers. Cases before the Dispute Resolution Panel (DRP) and applications for amendment under Section 264 of the Income Tax Act, 1961, pending until the specified date, are also included in this update.

This update is seen as a positive step towards easing litigation and providing relief to taxpayers by simplifying the process of resolving tax disputes. By addressing these issues, the scheme aims to make it easier for taxpayers to settle their disputes without facing additional financial burdens.

The changes introduced in the Vivad Se Vishwas scheme reflect a commitment to making tax dispute resolution more accessible and fair. By including more taxpayers and clarifying eligibility criteria, the scheme aims to reduce litigation and provide a smoother path for resolving tax issues.