Effective October 1, 2024, the DTVSV Scheme provides an amicable resolution mechanism for income tax disputes pending before appellate authorities, such as the Income Tax Appellate Tribunal (ITAT), High Court, and Supreme Court.
The Direct Tax Vivad Se Vishwas (DTVSV) Scheme, 2024, introduced by Union Finance Minister Nirmala Sitharaman in the Union Budget 2024-25, is a groundbreaking initiative aimed at resolving pending income tax disputes efficiently. This scheme reduces litigation for taxpayers and streamlines processes for tax authorities. Here’s a detailed breakdown of the scheme, its benefits, eligibility, and filing procedures.
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What is the Direct Tax Vivad Se Vishwas (DTVSV) Scheme, 2024?
Effective October 1, 2024, the DTVSV Scheme provides an amicable resolution mechanism for income tax disputes pending before appellate authorities, such as the Income Tax Appellate Tribunal (ITAT), High Court, and Supreme Court. Taxpayers can enjoy reduced settlement amounts depending on their filing dates and eligibility, encouraging prompt dispute resolution.
Key Highlights of the DTVSV Scheme, 2024
- Reduction in Litigation: Resolves disputes pending as of July 22, 2024, under various tax forums.
- Incentivized Timely Filing: Taxpayers filing declarations before December 31, 2024, receive a reduced settlement amount.
- Differentiated Benefits: Offers more significant reductions for new appellants than for old appellants.
Eligibility Criteria for the DTVSV Scheme, 2024
Taxpayers can opt for the scheme if they meet one of the following conditions as of July 22, 2024:
- Pending Appeals: Disputes under CIT(A), ITAT, High Court, or Supreme Court.
- DRP Objections: Objections filed with the Dispute Resolution Panel (DRP) under Section 144C, where directions are pending.
- Post-DRP Directions: DRP directions issued, but the Assessing Officer (AO) has not passed a final assessment order.
- Section 264 Applications: Revision applications pending under Section 264 of the Income Tax Act.
Forms Under the DTVSV Scheme, 2024
The scheme mandates the use of specific forms for seamless resolution:
- Form-1: Declaration and Undertaking
- Filed to express intent for dispute settlement.
- Requires taxpayers to withdraw related legal proceedings.
- Electronically acknowledged by the designated authority.
- Form-2: Certificate of Tax Arrears
- Issued by the designated authority to provide details of the tax arrear and the settlement amount.
- Form-3: Payment Intimation
- Declarants use this to inform the designated authority about settlement payments and submit proof of withdrawn disputes.
- Form-4: Final Settlement Order
- Confirms the full and final settlement by the designated authority.
Settlement Amount Payable Under the DTVSV Scheme, 2024
The payable amount varies based on the nature of the dispute and filing dates:
| Type of Tax Arrear | Before 31.12.2024 | After 1.01.2025 |
| Disputed Tax (Appeal filed post 31.01.2020) | Disputed Tax | Disputed Tax + 10% |
| Disputed Tax (Appeal filed pre 31.01.2020) | Disputed Tax + 10% | Disputed Tax + 20% |
| Disputed Interest/Penalty/Fee (Post 31.01.2020) | 25% of the disputed amount | 30% of the disputed amount |
| Disputed Interest/Penalty/Fee (Pre 31.01.2020) | 30% of the disputed amount | 35% of the disputed amount |
Procedure for Filing Under the DTVSV Scheme, 2024
- Declaration and Withdrawal of Appeals
- Taxpayers file declarations using Form-1 and withdraw all related legal proceedings.
- Appeals before High Court or Supreme Court require formal withdrawal after obtaining a certificate under Section 92.
- Payment and Certification
- The designated authority determines the settlement amount within 15 days of declaration receipt.
- Taxpayers must pay the settlement amount and submit proof using Form-3.
- Final Settlement
- The authority issues Form-4, confirming dispute resolution. Matters covered under this order cannot be reopened.
- Non-Compliance
- False particulars or violation of scheme terms invalidates the declaration.
- Legal proceedings and claims are reinstated in such cases.
Benefits of the DTVSV Scheme, 2024
- Reduced Litigation: Resolves disputes faster and with lower costs.
- Clear Procedures: Electronically filed forms and automated acknowledgment.
- Financial Incentives: Significant reductions for timely compliance.
Conclusion
The Direct Tax Vivad Se Vishwas (DTVSV) Scheme, 2024, is a transformative initiative aimed at minimizing tax litigation burdens while offering a clear path for dispute resolution. Eligible taxpayers should carefully evaluate their cases and leverage the benefits of this scheme to achieve a hassle-free settlement. Filing declarations promptly can lead to substantial savings and bring closure to long-pending disputes.
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