Income Tax Department Extends Deadline for Interest and Penalty Exemption: New Date Announced

The Income Tax Department has extended the deadline for taxpayers to claim exemptions from interest and penalties under the Direct Tax Vivaad Se Vishwas Scheme, 2024. Here’s everything you need to know about the revised dates and provisions.

Revised Deadline for Filing Information

Initially, the scheme required taxpayers to submit their declarations by December 31, 2024, to avail of a 100% waiver on interest and penalty charges. However, as per the latest circular issued by the Central Board of Direct Taxes (CBDT), the deadline has now been extended to January 31, 2025. This extension aims to provide taxpayers more time to settle disputes under the scheme.

Key Provisions of the Scheme

The Vivaad Se Vishwas Scheme, 2024, was introduced to resolve pending direct tax disputes and enable taxpayers to focus on their businesses. Under the scheme:

• 100% Payment of Disputed Tax: Taxpayers who submit their declarations before January 31, 2025, will need to pay 100% of the disputed tax amount, with interest and penalty fully waived.

• Post-February 2025 Declarations: Taxpayers filing declarations after February 1, 2025, will have to pay 110% of the disputed tax demand.Eligibility Criteria

The scheme is open to taxpayers with ongoing disputes or appeals, including:

• Cases pending with the Supreme Court, High Courts, Income Tax Appellate Tribunals, or Commissioner/Joint Commissioner (Appeal) as of July 22, 2024.

• Appeals filed by either the taxpayer or tax authorities, including writs and special leave petitions.

Magnitude of Pending Disputes

The initiative comes as part of the government’s efforts to address the backlog of tax disputes. As of now, approximately 2.7 crore direct tax disputes, amounting to ₹35 lakh crore, are pending at various legal forums.