Direct Tax Vivad Se Vishwas Scheme To Come Into Effect From October 1

The Central Board of Direct Taxes has officially announced the Direct Tax Vivad Se Vishwas Scheme, 2024, aimed at resolving pending income tax disputes. Set to take effect on October 1, 2024, this initiative follows the announcement made by Union Minister for Finance Nirmala Sitharaman in the Union Budget 2024-25.

The DTVSV Scheme, enacted through the Finance (No. 2) Act, 2024, introduces a structured approach to tax dispute resolution. Notably, it offers lower settlement amounts for “new appellants” compared to “old appellants,” incentivising timely participation in the scheme. Taxpayers who file their declarations by December 31, 2024, will also benefit from reduced settlement amounts relative to those who file after this date.

To facilitate the scheme, four specific forms have been introduced:

• Form-1: Declaration and undertaking by the declarant.

• Form-2: Certificate to be issued by the Designated Authority.

• Form-3: Intimation of payment by the declarant.

• Form-4: Order for full and final settlement of tax arrears by the Designated Authority.

Each dispute requires a separate Form-1, unless both the appellant and the income tax authority have filed an appeal regarding the same order, in which case a single Form-1 suffices. Payment intimation must be submitted using Form-3 along with proof of withdrawal of any related appeals or petitions.

Forms 1 and 3 will need to be submitted electronically via the Income Tax Department's e-filing portal.