Study OAS · 01 January 2025

Vivad Se Vishwas Scheme

• The Vivad Se Vishwas (VsV) scheme was introduced in the Union Budget 2024-25 by Union Finance Minister Nirmala Sitharaman.
• It aims to resolve income tax disputes by allowing taxpayers to waive interest and penalties if they file a declaration before the stipulated deadline and pay the disputed amount along with a specified percentage.

Key Features of the Vivad Se Vishwas Scheme

• Deadline Extension: The original deadline was December 31, 2024, but it has been extended to January 31, 2025.
• Eligibility: Taxpayers with disputes/appeals can opt for this scheme to conclude their income tax disputes.
• Payment Terms:
• If the declaration is filed by January 31, 2025, taxpayers must pay 100% of the disputed tax demand.
• For declarations filed on or after February 1, 2025, taxpayers must pay 110% of the disputed tax demand.

Benefits of the Scheme

• Resolution of Disputes: Helps taxpayers conclude their income tax disputes effectively.
• Avoidance of Additional Penalties: By opting for the scheme, taxpayers can avoid additional penalties and interest.
• Simplified Process: The scheme provides a straightforward process for taxpayers to resolve their disputes.

Additional Information

Central Board of Direct Taxes (CBDT)

• The Central Board of Direct Taxes (CBDT) is a part of the Department of Revenue in the Ministry of Finance, Government of India.
• It is a statutory authority functioning under the Central Board of Revenue Act, 1963.
• The CBDT is headed by a chairman and also comprises six members, all of whom are ex officio Special Secretaries to the Government of India.
• The Chairman and Members of CBDT are selected from the Indian Revenue Service (IRS), whose members constitute the top management of the Income Tax Department.
• The CBDT provides inputs for the policy and planning of direct taxes in India and is also responsible for the administration of direct tax laws through the Income Tax Department.
• The functions of CBDT include:

  • Formulation of policies related to direct taxes
  • Dealing with matters relating to levy and collection of direct taxes
  • Supervision of the functioning of the entire Income Tax Department
  • Suggesting legislative changes in direct tax enactments
  • Suggesting changes in tax rates and structure of taxation in line with the policies of the Government