The Vivad Se Vishwas 2.0 (VSV 2.0) scheme, aimed at resolving long-standing income tax disputes, officially became operational on October 1, 2024. Announced by Finance Minister Nirmala Sitharaman during her budget speech in July, this scheme seeks to address pending appeals and offers taxpayers an opportunity to settle their cases at a lower cost, saving them time and resources.
Objective of Vivad Se Vishwas 2.0
The primary goal of VSV 2.0 is to resolve income tax disputes in a timely and cost-effective manner. The scheme enables taxpayers to settle cases that may have dragged on for years, allowing for a quicker resolution with reduced legal expenses. Taxpayers can pay a smaller portion of the disputed amount, benefiting from reduced financial liabilities while the government recovers outstanding dues.
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Key Clarifications by CBDT
In response to numerous queries from taxpayers, the Central Board of Direct Taxes (CBDT) issued updated guidelines on October 15, 2024, to clarify the scheme’s provisions. These include specific exclusions, eligibility criteria, and timelines for filing forms.
Cases Not Covered Under VSV 2.0
Certain cases are excluded from the VSV 2.0 scheme. These include cases assessed under sections 143(3), 144, 147, 153A, or 153C of the Income Tax Act, particularly those involving searches initiated under sections 132 or 132A. Additionally, cases related to the COFEPOSA Act, UAPA Act, NDPS Act, PBPT Act, PC Act, and PMLA are also not covered under the scheme.
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Key Forms and Timelines
Four forms are required for participating in the VSV 2.0 scheme:
– Form 1: Declaration and undertaking form, to be submitted by taxpayers by December 31, 2024.
– Form 2: Issued by the designated authority within 15 days of receiving Form 1, specifying the amount payable by the taxpayer.
– Form 3: To be submitted by taxpayers to disclose payment details after making the required payment within 15 days of receiving Form 2.
– Form 4: Issued by the authority to confirm the full and final settlement of tax arrears.
Eligibility and Scope of VSV 2.0
All income tax appeals pending before the High Court or Supreme Court as of July 22, 2024, are eligible for the VSV 2.0 scheme. However, the scheme excludes disputes related to wealth tax, securities transaction tax (STT), commodity transaction tax, and the equalisation levy.
CBDT’s Efforts for Transparency and Uniformity
To ensure transparency and consistency, the CBDT has provided detailed guidelines to help taxpayers and authorities navigate the VSV 2.0 process. These guidelines aim to streamline dispute resolution and offer relief to taxpayers while facilitating the recovery of outstanding tax dues for the government.
