Income Tax India: The Income Tax Department has extended the deadline for the
Vivad Se Vishwas Scheme from
December 31, 2024, to January 31, 2025. This extension is a significant relief for taxpayers entangled in income tax disputes. The scheme allows taxpayers to resolve their pending disputes and reduce their tax liabilities effectively.
Why is this Scheme Important?
Currently, India has nearly
27 million disputed tax cases stuck in judicial processes and awaiting resolution. These disputes not only burden taxpayers but also hinder the revenue collection process for the government.
Through the Vivad Se Vishwas Scheme, taxpayers can:
- Resolve disputes quickly and affordably.
- Avoid hefty interest and penalties.
- Settle their tax liabilities at a reduced cost.
Objectives and Benefits of the Scheme
The scheme aims to:
- Provide a swift resolution mechanism for tax disputes.
- Build trust between taxpayers and the Income Tax Department.
- Offer relief by waiving off penalties, interest, and other fees upon partial payment of the disputed tax amount.
Rules and Conditions of the Scheme
For Applications Submitted by January 31, 2025:
- Taxpayers must pay 100% of the disputed tax.
- Only 25% of the disputed interest, penalty, and fees needs to be paid.
For Applications Submitted After February 1, 2025:
- Taxpayers must pay 110% of the disputed tax.
- They will also need to pay 30% of the disputed interest, penalty, and fees.
For Previous Applicants:
- Those applying by January 31, 2025, must pay 110% of the disputed tax and 30% of the disputed interest, penalty, and fees.
- After February 1, 2025, previous applicants will need to pay 120% of the disputed tax and 35% of the disputed interest, penalty, and fees.
What Should Taxpayers Do?
To avail of the scheme, taxpayers need to follow these steps:
- Form 1: File this form to declare their intent to resolve the dispute under the scheme.
- Form 2: The Income Tax Department will issue this form to confirm the terms of the settlement.
- Taxpayers must pay the disputed tax within 15 days of receiving Form 2.
Importance of the Deadline
Taxpayers who submit applications by
January 31, 2025, can save an additional
10% on disputed tax payments. Delaying the application beyond this date will lead to higher payment obligations. Hence, timely application is crucial to maximize savings.
Conclusion
The
Vivad Se Vishwas Scheme offers taxpayers a golden opportunity to resolve their income tax disputes. It not only eliminates prolonged litigation but also provides relief from penalties and interest.
The decision to extend the deadline ensures that more taxpayers can benefit from the scheme.
Apply before January 31, 2025, to avoid additional costs and settle your disputes hassle-free.