On provisions of the direct tax vivad se vishwas scheme 2024
Circular No. 19/024 was issued by the Central Board of Direct Taxes on 16 December 2024. Its subject is On provisions of the direct tax vivad se vishwas scheme 2024.
Issues Guidance Note 2/2024 on the Direct Tax Vivad se Vishwas Scheme, 2024, a second set of FAQ answers under section 97 of the Scheme, picking up from FAQ No. 36 where Guidance Note 1/2024 (Circular No. 12/2024 dated 15 October 2024) left off. It withdraws FAQ No. 8 of the earlier Guidance Note and re-issues it, modified, as FAQ No. 36. On the points the extract carries: the lower rate turns on the date the declaration is filed, not the date of payment — a declaration filed by 31 December 2024 pays the column (3) amount and one filed on or after 1 January 2025 the column (4) amount in the Table in section 90 of the Finance (No. 2) Act, 2024, while payment itself is due within 15 days of receipt of the certificate in Form No. 2 under section 92(2). An additional ground filed on or before 22 July 2024 counts in computing disputed tax. Penalty is not part of disputed tax for a quantum settlement, but on settling the quantum appeal the Designated Authority grants immunity from penalty leviable or levied on the tax arrears settled, and a penalty appeal unrelated to quantum additions can be settled on its own if it was pending on 22 July 2024.
After the Scheme came into force on 1 October 2024 and the Rules and Forms were notified on 20 September 2024, further queries kept coming from stakeholders beyond those answered in Guidance Note 1/2024, so the Board issued a second set of answers under its section 97 power to give directions in public interest.
F. No. 370142/2212024 -TPL
Government of India
Ministry of Finance
Department of Revenue
Circular No. 19 of2024
Central Board of Direct Taxes
******************************************
Dated: 16th December, 2024
Sub.: Guidance Note 2/2024 on provisions of the Direct Tax Vivad se Vis/lWas Scheme,
2024 - reg.
The Direct Tax Vivad Se Vishwas Scheme, 2024 (hereinafter referred as 'DTVSV Scheme,
2024' or 'Scheme') has been enacted vide Chapter IV of Finance (No.2) Act, 2024 to provide for
dispute resolution in respect of pending income tax litigation. The objective of the Scheme is to,
inter alia, reduce pending income tax litigation, generate timely revenue for the Government and
benefit taxpayers by providing them peace of mind, certainty and savings on account of time and
resources that would otherwise be spent on the long-drawn and vexatious litigation process.
2. The commencement date of the said Scheme has already been notified as 1.10.2024. Further,
Rules and Forms for enabling the Scheme have also been notified on 20.09.2024. After enactment
of the DTVSV Scheme, 2024, several queries were received from the stake-holders seeking
guidance in respect of various provisions contained therein.
3. Accordingly, under Section 97 of the DTVSV Scheme, 2024 which empowers the Board to
issue directions or instructions in public interest, Guidance Note 1/2024 in the form of answers to
the frequently asked questions (FAQs) was issued vide circular no. 12 of 2024 dated 15 .10.2024.
However, several other queries have been received from the stake-holders for the clarification.
Thus, Guidance Note 2/2024 in the form of answers to the frequently asked questions (FAQs) is
hereby issued to provide further clarification. This will be helpful for the tax-payers for creating
better awareness and understanding with respect to the provisions of the Scheme.
4. In the present Guidance Note 2/2024, FAQ No.8 of the Guidance Note 1/2024 has been
modified and incorporated as FAQ No. 36. Thus, FAQ No.8 of the Guidance Note 1/2024 shall be
considered as omitted.
S. Issue Comments
No.
Elil!ibilitv of cases
36. Suppose a taxpayer is eligible to Yes, such cases are eligible for settlement under the
apply for DTVSV Scheme, 2024 Scheme as appeal was pending as on 22.7.2024.50. The DTVSV Scheme, 2024 provides for the different rates where declaration is filed on or before 31.12.2024 and where it is filed on or after 1.1.2025. Please clarify whether payment of disputed amount is also required to be made before 31.12.2024 for applicability of the lower rate?
Reference may be made to the provisions of the Scheme read with DTVSV Rules, 2024. As per Rule 3 of the DTVSV Rules, 2024, the amount payable is linked to the date of filing of declaration. Accordingly, where declaration is filed on or before 31.12.2024, the amount payable by the declarant shall be as mentioned in column (3) of the Table specified in section 90 of the Finance (No.2) Act, 2024. However, where a declaration is filed on or after 1.1.2025, the amount payable by the declarant shall be as mentioned in column (4) of the said Table.
The payment of disputed amount is required to be made as per section 92(2) of the DTVSV Scheme i.e. within 15 days of the date of receipt of certificate in Form No.2.
51. Whether any additional ground filed in relation to an appeal is to be considered while computing disputed tax?
If any additional ground has been filed on or before 22nd July, 2024, it shall be considered for the purpose of computing disputed tax.
Disputed Penalty
52. Suppose penalty has been levied after the taxpayer has filed a declaration for the settlement of the associated quantum appeal. In such a case, whether on settlement of tax arrears of the quantum appeal, penalty in relation to such tax arrears would be waived off?
Reference may be made to the definition of tax arrears in section 89(1)(0) of the Scheme. Interest chargeable or charged and penalty leviable or levied are included in tax arrears. However, the settlement for quantum appeal is made as a percentage of disputed tax, where disputed tax means income-tax including surcharge and cess. Thus, penalty leviable or levied are not included in disputed tax for settlement of quantum appeal.
Accordingly, on settlement of quantum appeal, the Designated Authority will grant immunity from penalty leviable or levied in respect of tax arrears settled under the Scheme.
53. Suppose in a case, the additions made in assessment have reached finality. There is no quantum appeal pending as on 22nd July, 2024. However, penalty appeal is pending as on 22nd July, 2024 which relates to the additions made in the said assessment order. Can a penalty appeal be settled independent of quantum appeal?
Penalties which are unrelated to quantum additions are clearly eligible for settlement where an appeal in respect of such penalty is pending as on 22nd July, 2024. These penalties are unrelated to quantum additions and therefore can be settled independently of quantum appeals.
Further, where the additions made in an assessment have reached finality and thus there is no quantum appeal pending as on 22nd July, 2024, there is no disputed income or disputed tax as on the specified date i.e. 22nd July, 2024. Therefore, such penalty can be settled separately under the Scheme as per Sl. No. (c) & (d) of the Table in section 90 of the Scheme.
54. Whether appeal against penalties that are not related to quantum assessment like penalty u/s 271 B, 271BA, 271OA of the Act etc. are also waived upon settlement of appeal relating to disputed tax?
No, appeal against such penalty order is required to be settled separately.
AP A/MAP cases
55. In case of APA/MAP, can the Scheme be opted for settling disputes pertaining to non-APA/MAP adjustments?
The Scheme envisages settling dispute in full. The Scheme does not envisage settling issues in part. Therefore, whatever issues are there in a pending appeal are to be settled in full whether they pertain to APA/MAP adjustments or otherwise.
Taxes Paid before filing Declaration
56. Whether credit for earlier taxes paid against disputed tax will be available against the payment to be made under DTVSV Scheme, 2024?
Yes. Credit for taxes paid against the disputed tax before filing declaration shall be available to the declarant.
57. In such cases where Appeal is pending as on 22nd July, 2024 but disputed tax demands have been already fully paid before filing of declaration. Are such cases eligible to avail DTVSV Scheme, 2024?
Yes. Reference may be made to section 94 of the DTVSV Scheme, 2024. The situation mentioned is clearly covered in section 94(2) of the Scheme. Accordingly, such cases shall be eligible for the Scheme.
TDS related Queries
58. In such cases where deductee has settled his appeal, whether TDS deductor would be relieved from its liability u/s 201(1) of the Act. Further, whether TDS deductor would be allowed to claim expense deduction u/s 40(a) of the Act?
Where a deductee has settled his tax liability, the deductor is relieved from his liability other than interest payable. However, consequential relief for expense deduction u/s 40(a) of the Act shall be available to such deductor.
59. Whether appeals filed before the Appellate Authority against intimation passed u/s 200A of the Act (regarding intimation on processing of TDS returns) can be settled under DTVSV Scheme 2024?
Yes, if appeal in respect of intimation u/s 200A is pending as on 22nd July, 2024.
Miscellaneous
60. Whether Designated Authority can amend his order to rectify any patent errors?
Yes, the Designated Authority shall be able to amend his order under section 92 to rectify any apparent errors.
61. Where appeal is pending in respect of primary assessee which is a foreign entity not having adequate business presence in India. Whether such foreign entity can file declaration and settle its dispute through its representative assessee having presence in India?
Yes. With proper authorisation, a representative assessee can opt for settlement under the Scheme.
Even in the case of deceased tax-payer, the legal representative may also opt for settlement under the Scheme.
62. If the taxpayer avails DTVSV Scheme, 2024 for Transfer Pricing adjustment, will provisions of section 92CE of the Act apply separately?
Yes, secondary adjustment under section 92CE will be applicable. However, it may be noted that the provision of secondary adjustment as contained in section 92CE of the Act is not applicable for primary adjustment made in respect of an assessment year commencing on or before the 1st day of April 2016. That means, if there is any primary adjustment for assessment year 2016-17 or earlier assessment year, it is not subjected to secondary adjustment under section 92CE of the Act.
_[Sgd.]_ SURBENDU THAKUR
Under Secretary to the Govt. of IndiaCopy to:
1. PS to FM/ OSD to FM/ PS to MoS(F)/ OSD to MoS(F)
2. OSD to Secretary (Revenue)
3. Chairman, CBDT & All Members, CBDT
4. All Pr. DGsIT/ Pr. CCsIT
5. All Joint Secretaries/CsIT/ Directors/ Deputy Secretaries/ Under Secretaries of CBDT
6. The C&AG of India
7. The JS & Legal Adviser, Ministry of Law & Justice, New Delhi
8. CIT (M&TP), Official Spokesperson of CBDT
9. Web Manager, ADG(S)-4, % Pr. DGIT (Systems) for uploading on official website.
10. JCIT (Database Cell) for uploading on www.irsofficersonline.gov.inPage 6 of 6
When settling a pending appeal under the Scheme — working out the amount payable in Form No. 1, reading the Form No. 2 certificate and its 15-day clock, and dealing with penalty proceedings that survive the quantum settlement.
Forms it names. Form No. 2
Rules it names. Rule 3 of the Income-tax Rules, 1962. The 1962 Rules were replaced by the Income-tax Rules, 2026, which renumbered nearly everything: a rule number quoted here almost never means the same rule today.
It mentions. Circular No. 12/2024, Circular No. 19/2024
Source: the Income Tax Department’s own published text — its page for this instrument.