Vivad se Vishwas 2020

The Vivad se Vishwas scheme was announced by the Government of India in the 2020 Budget and enacted by Parliament as the Direct Tax Vivad se Vishwas Act, 2020 on 17 March 2020. The purpose of the scheme is to provide a one-time opportunity to settle pending direct-tax disputes by paying a specified amount of tax and obtaining waiver of interest, penalty and immunity from prosecution.This benefits you by cutting down time-consuming litigation, bringing tax-certainty, freeing management time and reducing litigation costs.

Key Features
Financial Assistance
Eligibility Criteria
Documents Required
Application Process for the Scheme

Key Features

Resolution of pending direct-tax disputes: Cases before the Commissioner, ITAT, High Court, Supreme Court and certain other forums as on the “specified date” are eligible.
Waiver of interest, penalty and immunity from prosecution: On payment of the settlement amount under the scheme, interest, penalty and prosecution are waived for the issues covered.
Payment of disputed tax at reduced rate: The amount payable by you is defined in the Act: for most disputes, the disputed tax amount only, or tax plus limited percentage of interest/penalty, depending on circumstances.
Eligibility cut-off 31 January 2020: Only disputes which are pending as of that date qualify.
Application/declaration process, then payment by deadline: You must file a declaration under the scheme and make payment by the deadlines specified to avail full benefits.
Exclusions apply: Some disputes are specifically excluded — for example unresolved foreign-income cases, prosecutions already initiated, large search cases beyond thresholds.

Financial Assistance

Component	Benefit / Assistance Provided	Detailed Explanation & Example
Settlement amount of tax	You pay only the “disputed tax” amount instead of full tax + interest + penalty.	E.g., if you have a dispute where tax of ₹ 1 crore is in question plus interest/penalty, under the scheme you may pay ₹ 1 crore and no interest/penalty if conditions met.
Waiver of interest, penalty & prosecution	You save on additional costs of litigation, extended interest and penalty.	For example, without the scheme you might have to pay tax + interest ₹ 20 lakhs + penalty ₹ 30 lakhs + face prosecution costs; with scheme you avoid those extra charges.
Time and resource savings	Enables faster settlement than litigation, freeing up cash flow and management time.	E.g., instead of years of appeal and legal fees of ₹ 50 lakhs, you settle now, avoid prolonged cost and uncertainty.
Tax certainty	Once you opt-in and payment is made, the matter is closed and future appeals cannot be filed for the same dispute.	Example: You file declaration under scheme, pay the amount, get the certificate. You know the issue is settled and can plan your business without litigation hanging over you.

Eligibility Criteria

Who can apply:

You must be a taxpayer with a dispute in direct taxes.
The dispute must be pending as on 31 January 2020 before an appellate forum (CIT, ITAT, High Court, Supreme Court) or under a DRP order, etc.
You must file the declaration under the scheme and pay the required amount within the deadlines specified in the Act.

Who cannot apply:

Disputes in respect of assessment made following search/seizure under section 132/132A if disputed tax exceeds certain threshold (₹ 5 crores) are excluded.
Cases involving undisclosed foreign income/assets or where prosecution is already initiated are excluded.
Partial settlement of issues is not allowed: you must settle the full dispute of that assessment/order under the scheme.

Documents Required

Declaration form under the scheme
Details of the dispute: assessment order, appellate order, time-limit for appeal, demand notice, outstanding amount
Proof of filing appeal/petition or time-limit for appeal expiring as on 31 Jan 2020
Details of disputed tax, interest, penalty amounts
Taxpayer identity
Payment proof of settlement amount
Withdrawal of appeal , if applicable
Any other document as required by the designated authority

Application Process for the Scheme

Option 1: Apply with Bullit

Click here to start with guided support. Our team verifies eligibility, compiles documents, and handles application & follow-ups on your behalf. You can monitor progress while focusing on operations.
Recommended for: taxpayers seeking expert assistance to navigate the scheme and close litigation.

Option 2: Official Route

Identify the dispute you wish to settle under the VsV Act.
File Form-1 to the designated authority, specifying the dispute, tax amount, interest/penalty aspects.
After filing Form-1, the appeals/objections etc are deemed withdrawn once Form-2 certificate is issued.
Make the settlement payment by the deadline .
Submit Form-3 along with proof.
The authority issues Form-4 and dispute stands closed.

Option 3: Consulting Tax Advisor / Chartered Accountant
Engage a qualified CA or tax lawyer to analyse your pending cases, compute the amount payable, file declarations and coordinate with the tax department. Helpful especially for large/complex disputes.