Vivad se Vishwas Scheme 2020 was announced in 2020 as the “No Dispute but Trust Scheme: Vivad se Vishwas Scheme”. The aim of the Vivad Se Vishwas Scheme is to settle all the pending arguments under the category of direct taxes. This scheme is a conflict resolution scheme for both the government and taxpayers.
Vivad Se Vishwas scheme offers assurance and exemption to the taxpayer about income tax return filing. This scheme also guarantees timely revenue generation and saving of resources to the government. The VSV scheme was launched on 17 March 2020 to reduce the pending IT litigation.
Vivad Se Vishwas Scheme Aim:
The aim of the Vivad se Vishwas Scheme are as follows-
To Resolve Pending Income Tax Disputes and Litigation
- To Save the Time and Resources for the Government
- To Generate Timely Revenues for the Government
- To Help Taxpayers in Ending their Tax Disputes with the Tax Department by paying off the Disputed Tax
- Obtaining a disclaimer from the payment of Interest and Penalty
- To Get Immunity from Prosecution
Vivad Se Vishwas Scheme Benefits:
The benefits of the Vivad se Vishwas Scheme are as follows-
- Waiver of interest
- Immunity from penalty
- Immunity from prosecution
Vivad Se Vishwas Scheme Dates:
| Last date for filing a declaration | 31 December 2020 |
| Last date of paying an additional amount | 31 March 2021 |
Terms In Direct Tax Vivad Se Vishwas Act:
The necessary terms of the Vivad se Vishwas Scheme are as follows-
Appellant-
The term appellant represents a person who can fulfill the eligibility criteria and can provide a valid application for the declaration under the Vivad Se Vishwas Scheme.
Appellate Forum-
The term appellate forum means either one of Supreme Court, High Court of a State, Income Tax Appellate Tribunal, The Commissioner (Appeals).
Disputed Tax-
Disputed Tax will be determined as per the following table-
| Sr. no | Criterion | Disputed Tax |
| 1. | On the prescribed date, a Write Petition, an Appeal, or a Special Leave Petition (SLP) is still pending before the Appellate Forum | In an appeal/write-up/SLP, the amount of tax payable was to be decided against the appellant |
| 2. | An order of Writ Petition, Appeal, or Special Leave Petition (SLP) has been passed by the Appellate Forum but the time period for filing an appeal or SLP against the order has not expired | If the order is given effect, the amount of tax payable by the appellant will be |
| 3. | An assessment officer has passed an order, but the time for filing an appeal against that order has not expired on the prescribed date | Tax must be paid by the appellant in accordance with such an order |
| 4. | On the prescribed date, the objection filed by the said appellant is pending before the DRP (Dispute Resolution Panel) under section 144C of the IT Act | The amount of tax payable by the appellant must be determined in accordance with the adjustments in this draft order |
| 5. | When an application for revision filed under section 264 of the IT Act is pending on the prescribed date | The amount of tax payable by the appellant if the revision request is not accepted |
| 6. | If the Commissioner (Appeals) has issued a notice of enhancement under section 251 of the Income Tax Act on or before the specified date | Tax payable by the appellant shall be as per clause (1) plus any additional tax related to matters for which a notice of enhancement was issued |
Disputed Interest-
An amount of interest computed in any case under the conditions of the IT Act 1961 is known as disputed interest, where the appellant has filed an appeal regarding such interest.
Disputed Penalty-
The term disputed penalty means a penalty is not charged with respect to disputed tax or disputed income, where the appellant has filed a request regarding such penalty.
Tax Arrear-
The term Tax Arrear means either one of the Aggregate Amount of the Disputed Tax, Interest Chargeable, or Charged on such a Disputed Tax, and Penalty Levied or Leviableon such a Disputed Tax, Disputed Interest, Disputed Penalty, Disputed Fee.
Vivad Se Vishwas Scheme Eligibility:
The conditions under which a taxpayer becomes eligible to come under the Vivad se Vishwas Scheme are as follows:
- Appeals or Write petitions have been filed on or prior to 31.01.2020
- Orders for which the time period for filing appeal has not finished on 31.01.2020
- Cases pending prior to the DRP (Dispute Resolution Panel) on 31.01.2020
- Cases where DRP (Dispute Resolution Panel)has issued direction on or prior to 31.012020, but no such order has been passed
- Cases where assesses, have filed a revision under section 264 of the IT Act on or prior to 31.01.2020 and are pending
- Any search case if the disputed tax demand is less than Rs 5 crores in a year
- The appeals or writ petitions filed either by the tax department or taxpayers
- Disputes wherein the taxpayers have already made the payment and are eligible as well
- Cases of Arbitration in India or Abroad
Vivad se Vishwas Scheme Dispute Types:
The different types of the dispute that come under the Vivad se Vishwas Scheme Direct tax are as follows-
- Disputed Tax
- Disputed IDS
- Disputed Penalty
- Disputed TCS
- Disputed Interest
- Disputed Fee
Payment Schedule under Direct Tax Vivad Se Vishwas Act:
| Payment Made | The appeal relates to Disputed Tax | The appeal relates to Disputed Penalty, Interest, or Fee |
| On or prior to 31 March 2021 | 100% of the differed tax (125%) | 25% of the renounced penalty, welfare, or fee |
| On or prior to 01 April 2021 | 110% of the discussed tax in (135%)such a way that it does not improve the real demand | 30% of the renounced penalty, interest, or fee |
Taxpayer Excluded From Scheme:
Taxpayers are excluded from the Vivad se Vishwas Scheme in the following circumstances-
- If the Disputed Tax is more than Rs 5 crores in a year
- Prosecution case filed by the Income Tax Department under the provisions of the Income Tax Act
- Cases pertaining to the Unrevealed Foreign Income and Assets
- Cases achieved based on the details obtained from Foreign Countries.
- Cases under the acts are as follows-
- Narcotic Drugs and Psychotropic Substances Act 1985
- Special Courts Act
- Unlawful Activities (Prevention) Act 1967
- Prevention of Corruption Act 1988
- Conservation of Foreign Exchange & Prevention of Smuggling Activities Act 1974
- Prevention of Money Laundering Act 2002
- Prohibition of Benami Property Transactions Act 2016
Appeal Withdrawal Process for Taxpayer:
After filing the declaration, the request filed by the declarant will be regarded as withdrawn from the date of filing
- Then the designated authority will issue the certificate
- The declarant can withdraw such an appeal or the write petition
- The declarant can withdraw any proceeding and can provide its proof together with the declaration
- The declarant needs to provide an implementation for waiving his right to seek or follow any remedy covered under the Vivad se Vishwas Scheme
Appeal Withdraw Conditions:
The situations under which a taxpayer can withdraw an appeal under the vivad se Vishwas scheme are as follows-
- Consequent to such a statement and fulfillment of terms and conditions, appeals of taxpayers and tax department in regard of the disputed Income, disputed Penalty, disputed Fee, or disputed Interest pending before either of the following can be withdrawn:
- Commissioner
- DRP
- ITAT
- High Court, or
- Supreme Court of India
- In the case of taxpayer’s appeals, a certificate to the effect needs to be filed by the taxpayer as well
Responsibilities of Designated Officer:
The responsibilities of the selected officer under the Vivad se Vishwas Scheme are as follows-
- According to the act, anyone who is below the Income Tax Commissioner’s rank, as notified by the Principal Chief Commissioner, cannot be a designated officer
- The designated authority must calculate the amount due by the declarant within 15 days after receiving the declaration
- A certificate of declaration regarding the tax arrears and the amount payable will be issued by the designated officer
- Upon payment of the amount due, the designated authority will issue an order affirming payment
- For the matter stated therein, the order of the designated authority will serve as conclusive proof
Check out the Vivad Se Vishwas Yojana PDF.
Here, we cover a small piece of information about the Vivad Se Vishwas Yojana. For the application process and to know more about the VSV Scheme and other government schemes you can visit the VSV Yojana Official Website. Stay tuned to get notified about the other Government schemes.