The Indian government has announced that October 1, 2024, will be the official starting date for the Vivad Se Vishwas Scheme 2.0. This scheme is designed to help resolve direct tax disputes that are currently under appeal, offering a solution for both taxpayers and authorities. The scheme was initially introduced in the 2024-25 Budget presented in July.

Aim of the Scheme

The Vivad Se Vishwas Scheme 2.0 focuses on resolving tax disputes quickly and efficiently. It aims to reduce the burden of litigation by offering a simplified process for settling disputes. Currently, around 2.7 crore tax demands amounting to Rs 35 lakh crore are under dispute in various courts and legal forums. This scheme is expected to help address these long-standing tax-related issues.

Vision for Simplified Taxes

In her 2024 Budget speech, Finance Minister Nirmala Sitharaman highlighted the government’s commitment to simplifying the tax system. The goal is to provide certainty for taxpayers, reduce ongoing litigation, and boost revenues by encouraging faster resolutions. The Vivad Se Vishwas 2.0 scheme is part of this broader effort to streamline the tax process.

Details and Eligibility

Taxpayers with ongoing disputes, including appeals such as writs and special leave petitions, can opt for this scheme. These appeals could be filed by either the taxpayer or the tax authorities and must be pending as of July 22, 2024. Eligible cases include disputes before the Supreme Court, High Courts, the Income Tax Appellate Tribunal (ITAT), and Commissioner (Appeals).

Additionally, cases under the Dispute Resolution Panel (DRP) and those with revision petitions pending before the Commissioner of Income Tax are also covered under the scheme.

Opinions and Upcoming Guidelines

Karishma R Phatarphekar, Partner at Deloitte India, noted that the official rules and forms for Vivad Se Vishwas 2.0 are expected to be released in the coming week. She emphasized that, given the short timeframe, taxpayers should make an informed decision quickly about whether to opt for the scheme.

First Vivad Se Vishwas Scheme

The first Vivad Se Vishwas Scheme was introduced in 2020 to resolve disputes related to direct taxes. It was a success, with over 1 lakh taxpayers taking part in the scheme. The government collected taxes worth Rs 75,000 crore as a result of the scheme.

The Vivad Se Vishwas Scheme 2.0 provides a valuable opportunity for taxpayers to resolve their disputes and avoid lengthy court battles. By taking advantage of this initiative, both the government and taxpayers can benefit from reduced litigation and faster resolution of tax issues.