Voluntary settlement scheme

Current Affairs

  • The budget 2023-24 has proposed a scheme for settling contractual disputes named Vivad se Vishwas II (Settling Contractual Disputes).
  • To settle contractual disputes of government and government undertakings, a wherein arbitral award is under challenge in a court, a voluntary settlement scheme with standardized terms will be introduced.
  • This will be done by offering graded settlement terms depending on the pendency level of the dispute,” Finance Minister Nirmala Sitharaman said in her budget speech.
  • Under the scheme, the voluntary option is given to the private sector to come into the scheme or not.

Vivad Se Vishwas Scheme:-

  • It is a direct tax scheme introduced by the Government of India in 2020 for settling disputes between taxpayers and the income tax department.
  • It aims to minimize tax-related litigation.
  • Under this scheme, an individual taxpayer can claim a full waiver of interest and penalty on the full and final settlement of the disputed tax amount.
  • There was a time limit set for the payment of taxes under the scheme.

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