Important Indian Schemes · Taxation

Vivad Se Vishwas Scheme

A direct-tax dispute resolution scheme — "from dispute to trust".

Original scheme 2020 · Vivad Se Vishwas 2.0 announced in Budget 2024-25 · CBDT / Ministry of Finance
First Version
2020
Version 2.0
2024
Domain
Direct taxes
Body
CBDT

Overview

The Direct Tax Vivad Se Vishwas scheme provides a mechanism for taxpayers to settle pending direct-tax disputes by paying the disputed amount of tax, with a waiver of interest and penalty in eligible cases. First introduced in 2020 to reduce litigation, a fresh version — Vivad Se Vishwas 2.0 — was announced in the Union Budget 2024-25 to settle the large number of income-tax appeals pending at various appellate levels.

Key Objectives

  • Reduce pending direct-tax litigation and free up resources
  • Allow taxpayers to settle disputes by paying the disputed tax
  • Provide waiver of interest and penalty in eligible cases
  • Generate timely revenue for the government and certainty for taxpayers

Salient Features

Under the scheme, a taxpayer can resolve a pending appeal by paying the disputed tax amount, typically with complete waiver of interest and penalty if settled within the prescribed window. Different settlement amounts may apply for disputes involving tax versus those involving only interest or penalty. The scheme is administered by the Central Board of Direct Taxes (CBDT) under the Ministry of Finance.

Key Facts at a Glance

First Introduced 2020
Latest Version Vivad Se Vishwas 2.0 (Budget 2024-25)
Applies To Pending direct-tax (income-tax) disputes
Key Benefit Waiver of interest & penalty in eligible cases
Administered By Central Board of Direct Taxes (CBDT)
Ministry Ministry of Finance
EXAM FOCUS  Remember it is a direct-tax dispute settlement scheme, first launched in 2020 with Vivad Se Vishwas 2.0 in Budget 2024-25, administered by CBDT, offering interest and penalty waiver.

Practice Questions

Five multiple-choice questions for revision

1. The Vivad Se Vishwas scheme is related to the settlement of:
a)Land disputes
b)Direct-tax disputes
c)Labour disputes
d)Border disputes
2. The first Vivad Se Vishwas scheme was introduced in:
a)2018
b)2020
c)2022
d)2024
3. A key benefit under the scheme is:
a)Doubling of tax
b)Waiver of interest and penalty
c)Higher penalties
d)Tax exemption forever
4. Vivad Se Vishwas is administered by:
a)SEBI
b)Central Board of Direct Taxes (CBDT)
c)RBI
d)GST Council
5. Vivad Se Vishwas 2.0 was announced in which budget?
a)Budget 2022-23
b)Budget 2023-24
c)Budget 2024-25
d)Budget 2021-22
Answer Key
1. (b) Direct-tax disputes2. (b) 20203. (b) Waiver of interest and penalty4. (b) Central Board of Direct Taxes (CBDT)5. (c) Budget 2024-25