New Delhi: The Union government on Friday said the second edition of the Direct Tax Vivad Se Vishwas Scheme 2024, which will help reduce litigation and bring certainty for taxpayers, will become operational from 1 October.
"In exercise of the powers conferred by sub-section (2) of section 88 of the Finance (No. 2) Act, 2024 (15 of 2024), the Central Government hereby appoints the 1st day of October 2024 as the date on which the Direct Tax Vivad Se Vishwas Scheme, 2024 shall come into force," the finance ministry said in a notification.
In July, while presenting the Annual Budget 2024-25, finance minister Nirmala Sitharaman announced the Vivad Se Vishwas Scheme 2024 for resolution of income tax disputes pending appeal.
The budget proposed to introduce a new scheme for settling pending appeals.
It was proposed to be made operational from a specified date with the last date for the scheme also proposed to be notified.
"The government has announced that the Vivad Se Vishwas (VSV) 2.0 scheme will be operational from 1 October 2024. With tax payment rates set to increase by 10% starting 1 January 2025, it is crucial for companies to evaluate their pending income tax litigations from both a cost-benefit standpoint and a broader non-tax perspective," said Karishma R. Phatarphekar, partner, Deloitte India.
"The Rules and Forms for VSV 2.0 are also announced. Given the limited time window, an informed decision on opting for the scheme should be made promptly," she added.
In 2020, the Centre had introduced the Direct Tax Vivad Se Vishwas Act 2020 (VSV 1.0), aimed at resolving tax disputes.
The scheme introduced in January 2020 received a good response from taxpayers, allowing the government to collect significant revenue.
About 483,000 direct tax appeals were pending across various forums, with ₹4.96 trillion in tax amounts tied up before the introduction of VSV 1.0 in 2020, according to consultancy firm Deloitte.
The scheme VSV 1.0 successfully resolved over 146,000 cases, leading to ₹540 billion being collected by the government.
