Vivad Se Vishwas Scheme: Settling Pending Tax Disputes

"Vivad Se Vishwas," meaning "from dispute to trust," has run as a periodic one-time settlement scheme rather than a standing option, and it is important to know exactly where it stands before assuming it is available to you. The most recent edition, the Direct Tax Vivad Se Vishwas Scheme, 2024 (VSV 2.0), closed to new filings well before this article was written. Here is what the scheme covered, what its actual current status is, and what to do if you have a dispute pending now.

What VSV 2.0 Was

Enacted under Chapter IV of the Finance (No. 2) Act, 2024, the Direct Tax Vivad Se Vishwas Scheme, 2024 let taxpayers with an income tax appeal, writ petition, or special leave petition pending as of July 22, 2024 settle the dispute by paying a defined percentage of the disputed tax, interest, or penalty. In exchange, the taxpayer received a full waiver of the remaining interest and penalty on the settled amount, and immunity from prosecution on that dispute. The scheme opened for declarations on October 1, 2024.

It Closed to New Filings on April 30, 2025

The scheme stopped accepting new declarations on April 30, 2025, and has not reopened since. This is the single most important fact for anyone searching for this scheme today: if you have a tax dispute that arose, or is only now reaching a stage where you are considering settlement, after that date, VSV 2.0 is simply not an available route. There is no live window to file into.

If you filed your declaration on or before the deadline, the closure does not affect you; it only stopped new entrants. Given the volume of filings in the final weeks before the deadline, Designated Authorities across jurisdictions have continued issuing Form-2 certificates (confirming the amount payable) and Form-4 final orders (closing the matter once payment is made and proof furnished) well into late 2025 and through 2026. If you filed in time and have not yet received a Form-4, the practical step is to follow up directly with your jurisdictional Designated Authority rather than assume the matter has lapsed or fallen through the cracks.

What to Do With a Dispute Today, With the Scheme Closed

With no active settlement scheme, a pending or new income tax dispute runs through the standard channels:

• The regular appeal process, starting with the Commissioner (Appeals) and, if needed, the Income Tax Appellate Tribunal and higher courts. See our guide on income tax notices for how disputes typically originate.
• A stay of demand to pause recovery while the appeal is pending, since an appeal alone does not stop the department from pursuing the demand. Our companion guide on applying for a stay of demand covers this in detail.
• Rectification, where the dispute stems from a genuine apparent error in the order rather than a substantive disagreement, which is a faster and narrower route than a full appeal.
• The Income Tax Settlement mechanism, where eligible, for cases that meet its specific conditions; this is a separate, narrower avenue from a Vivad Se Vishwas-style scheme and has its own eligibility criteria that should be checked with a CA before assuming it applies.

Will There Be Another Scheme?

The government has run dispute-settlement schemes periodically, an earlier Vivad Se Vishwas ran in 2020, and VSV 2.0 followed in 2024-2025, so a future edition is plausible in principle. As of this writing there is no confirmed announcement of a further scheme, and there is no reliable basis to predict when, or whether, one might be introduced. The practical guidance is not to delay resolving a genuine dispute on the assumption that a new scheme will appear; pursue the appeal, rectification, or stay-of-demand routes that are actually available now, and treat any future scheme as a bonus option if and when it is announced, not a plan.

Disputes involving disputed tax, interest, and penalty computations are easy to get wrong on your own, both in deciding whether a route like rectification genuinely applies and in calculating what a stay of demand deposit or an eventual settlement would actually cost. Our tax advisory services include dispute strategy, appeal drafting, and representation before the relevant authority.