In the Union Budget 2024-25, Finance Minister Nirmala Sitharaman announced the introduction of a new tax resolution scheme called the Direct Tax Vivad Se Vishwas (DTVSV) Scheme, 2024. This scheme, starting from October 1, 2024, aims to help settle pending income tax disputes efficiently.
Why Was the DTVSV Scheme Introduced?
The government introduced the DTVSV Scheme to resolve long-pending tax disputes between taxpayers and the Income Tax Department. It offers a way for taxpayers to settle their cases by paying a reduced amount based on certain conditions, instead of continuing with lengthy court appeals.
Key Highlights of the DTVSV Scheme, 2024
- Implemented by Law: The scheme was enacted under the Finance (No. 2) Act, 2024, and its rules were made official through a government notification dated September 20, 2024.
- Lower Settlement for New Appellants: Taxpayers who are filing appeals for the first time (“new appellants”) will pay a lower settlement amount compared to those with ongoing cases (“old appellants”).
- Early Bird Advantage: Taxpayers who submit their settlement declarations on or before December 31, 2024, will pay a lesser amount than those who file after this date.
Important Forms You Need to Know
The DTVSV Scheme involves four key forms, each serving a different purpose in the settlement process:
- Form 1: Used by taxpayers to file their declaration and submit an undertaking.
- Form 2: Issued by the Designated Authority as a certificate for the case.
- Form 3: Used by the taxpayer to inform the Designated Authority of payment, along with proof of withdrawal of any legal claims, appeals, or petitions.
- Form 4: The final order of settlement issued by the Designated Authority.
Filing and Submission Process
- Form-1 must be filed for each separate dispute. However, if both the taxpayer and the Income Tax Authority have filed appeals on the same issue, only one Form-1 needs to be submitted.
- Form-3 is where you provide details of your payment and proof of withdrawing any appeals or petitions related to your tax dispute.
- Electronic Filing: Both Forms 1 and 3 must be submitted electronically via the Income Tax Department’s e-filing portal: www.incometax.gov.in.
Where to Find More Information
For more detailed information, including specific provisions of the DTVSV Scheme, refer to sections 88 to 99 of the Finance (No. 2) Act, 2024 and the official Direct Tax Vivad Se Vishwas Rules, 2024.
Government’s Initiative for Litigation Management
The DTVSV Scheme is part of the government’s broader effort to manage and reduce tax-related litigation, helping taxpayers settle disputes faster and more cost-effectively. By offering benefits like reduced settlement amounts and quicker resolution, the government hopes to ease the burden of litigation on both taxpayers and the authorities, encouraging smoother tax compliance. This initiative is another step towards simplifying the tax system and improving the ease of doing business in India.
