The Vivad Se Vishwas Scheme 2024 is a new plan introduced by the government for direct tax litigations for settling of the pending cases so as to reduce the litigations. The scheme was introduced in the Union Budget 2024 and the earlier Vivad Se Vishwas Scheme (VSV 1. 0) was initiated in the year 2020 which was quite effective to resolve tax disputes and liberate the stuck up tax revenues.

The Vivad Se Vishwas Scheme 2024 is set to become operational on October 1, 2024.. This scheme which has been released by the Finance Ministry seeks to bring finality to those transactions by providing a cheaper and more efficient means through which taxpayers and the Income Tax Department can sort out their differences. The main attention is paid to the limitation of legal proceedings and the resolution of controversies concerning direct taxes.

Key aspects of the scheme include:

• Eligibility: It relates to pending appeal, writ petition or any special leave petition as on 22nd July, 2024 and may extend to disputed tax, interest, penalties and fees.
• Incentives: Fines and additional interest may be forgone for the settlements and prosecution will not be commenced for the situations covered under the scheme. But certain categories of cases for example if a person has not disclosed his foreign income or assets is not covered by the scheme.
• Filing Process: Thus, once a taxpayers have filed declaration, all pending appeal in any court or tribunal of law shall be deemed to have been abandoned. According to the scheme, the declarant is supposed to pay the determined sum within 15 days after he has been provided with a certificate by the concerned authority.

It comes in the wake of the earlier launched Vivad Se Vishwas 1. 0, which settled many of the disputes and unleased large amounts of tax money. Those who have open cases should consider going through them to stand to gain from this resolution system The authors thus propose this resolution framework.

Key Objectives of VSV 2.0:

• Reduce Tax Litigation: The main aim is to reduce the number of cases that remain unresolved thus providing a channel through which the taxpayers can resolve their cases without necessarily going through the normal course of the law.
• Provide Relief: One of the major aspects of the scheme is that the taxpayers can settle on payments in compliance with the waivers on interest and penalties hence facilitating an inexpensive approach to dispute resolution.
• Streamline Appeals: It involves appeal at lower tiers as well as higher tiers including the appeal pending before the Joint Commissioner of Income Tax, the ITAT and the higher judiciary of High court and Supreme court.

Applicability of VSV 2.0:

• It also includes cases where objections have been filed before the Dispute Resolution Panel (DRP), but no directions have been issued, as well as cases where DRP directions have been given but the assessment is not complete.
• The scheme covers disputed tax, interest, penalties, and fees related to income tax, with certain exclusions.

Exclusions:

• Incidents of search and seize operations or operation tumbleweed, the failure to disclose other income or asset, or prosecution cases cannot be entered.
• Another one is income from undisclosed foreign income or any asset located outside the India, the tax recovery of which can lead to arrears is also eliminated.

Filing a declaration under the said scheme certainly helps taxpayers to avoid expensive protracted legal proceedings and resolve their cases which can save them on penalties and interest components that are bound to be raised. The resolution process under VSV 2. 0 will recommend after the payment is made by the taxpayer depending on the decision of the designated authority. VSV 2. 0 is expected to work for the advantage of both the taxpayers and the government as it helps in the completion of the backlogs on the tax issues and release of the revenues.

DISCLAIMER: The information provided in this article is intended for general informational purposes only and is based on the latest guidelines and regulations. While we strive to ensure the accuracy and completeness of the information, it may not reflect the most current legal or regulatory changes. Taxpayers are advised to consult with a qualified tax professional or you may contact to our tax advisor team through call +91-9871990777 or info@semantictaxgen.in