In line with the Union Budget 2024-25 announcement by Finance Minister Nirmala Sitharaman, the Central Board of Direct Taxes (CBDT) has formally notified the Direct Tax Vivad Se Vishwas Scheme 2024.

This scheme, effective from 1st October 2024, aims to settle long-pending income tax disputes by offering reduced settlement amounts, particularly for taxpayers who file declarations before specific deadlines.

The scheme incentivises taxpayers by offering lower settlement amounts to new appellants and those who file their declarations on or before 31st December 2024. Those filing declarations after this date will face higher settlement amounts.

To facilitate the process, the CBDT has introduced four key forms under the scheme:

Form-1: For filing a declaration and undertaking by the taxpayer (declarant)
Form-2: A certificate issued by the Designated Authority confirming the acceptance of the declaration
Form-3: For the taxpayer to intimate the designated authority of the payment made
Form-4: The final order issued by the Designated Authority marking the full and final settlement of the tax arrears

For each dispute, taxpayers are required to submit a separate Form-1, unless both the taxpayer and the income-tax authority have filed appeals on the same order, in which case a single Form-1 will suffice.

Taxpayers must file Forms 1 and 3 electronically through the Income Tax Department’s e-filing portal at www.incometax.gov.in. Upon payment, taxpayers must furnish proof of withdrawal of any related appeals, objections, or legal proceedings in courts, such as writ petitions or special leave petitions, alongside Form-3.