In order to provide more clarity on the second edition of the Direct Tax Vivad se Viswas scheme 2024 (VSV 2.0), which became operational on October 1, the Central Board of Direct Taxes (CBDT) on Tuesday issued a guidance note in the form of Frequently Asked Questions (FAQs).

The FAQ states that individuals are eligible for the Direct Tax Vivad Se Vishwas Scheme, 2024 if they meet any of the following conditions: an appeal, writ petition (WP), or special leave petition (SLP) is pending before an appellate forum as of July 22, 2024, either filed by the individual or the income tax authority; they have submitted objections to the Dispute Resolution Panel (DRP) under section 144C of the Income-tax Act, 1961, and no directions have been issued by the DRP by that date; the DRP has issued directions under section 144C(5), but the Assessing Officer (AO) has not completed the process; or they have filed an application for revision under section 264 of the Act, which is pending as of the specified date.

The objective of the scheme is to reduce pending income tax litigation, generate timely revenue for the government, and benefit taxpayers by offering peace of mind, certainty, and savings on time and resources typically spent on prolonged and contentious legal processes.

Moreover, the new scheme provides for lesser settlement amounts for a ‘new appellant’ compared to an ‘old appellant’, thereby creating a distinction. The scheme defines an “old appellant case” as one where the taxpayer was an appellant on or before January 31, 2020. The scheme also prescribes lesser settlement amounts for taxpayers who declare on or before December 31, 2024, compared to those who file the declaration thereafter.