CBDT Circular No. 20/2024 Extends Direct Tax Vivad Se Vishwas Scheme 2024 Payment Determination Deadline

The Direct Tax Vivad Se Vishwas Scheme 2024 (DTVSV 2024) came into force on 1 October 2024 under the Finance (No. 2) Act 2024, giving taxpayers a route to close pending income-tax disputes by paying the disputed tax and leaving the related interest, penalty and prosecution behind. The pricing was deliberately time-tiered: declare early and you pay less. On 30 December 2024 the Central Board of Direct Taxes (CBDT) issued Circular No. 20/2024 and moved the single most important date on that pricing ladder, 31 December 2024, forward by one month to 31 January 2025. This Morning Tax Tip walks through what sections 90 and 97(2) of the Scheme actually say, works a numeric example at both rate tiers, and lists the errors that showed up when declarations were later examined.

What the Section Says

The operative pricing of DTVSV 2024 lives in the Table under section 90 of the Scheme, which sets out the "amount payable by the declarant". That Table has two rate columns: column (3) for declarations filed up to a cut-off date, and column (4) for declarations filed after it. The original cut-off written into the Scheme when it took effect on 1 October 2024 was 31 December 2024 for column (3); from 1 January 2025 the higher column (4) amount applied.

The amount payable turns on two things: whether the arrear is disputed tax or only disputed interest, penalty or fee, and whether the declarant is a "new appellant" or an "old appellant". A new appellant is one whose appeal, writ or special leave petition was filed after 31 January 2020; an old appellant is one whose dispute was already pending on or before 31 January 2020, carried over from the earlier 2020 Vivad Se Vishwas vintage. New appellants pay less, as the table below shows.

The second lever is section 97(2), the enabling provision CBDT relied on to issue Circular No. 20/2024. Section 97(2) lets the Board issue directions and orders to give effect to the Scheme. Using exactly that power, the Circular dated 30 December 2024 extended "the due date for determining amount payable" under column (3) of the section 90 Table from 31 December 2024 to 31 January 2025. The underlying statute is the Direct Tax Vivad Se Vishwas Scheme 2024 as enacted in the Finance (No. 2) Act 2024, available on indiacode.nic.in, while the Circular itself sits on incometax.gov.in.

How Circular No. 20/2024 Moved the Date

The practical effect of the 30 December 2024 Circular was narrow but valuable. Before it, a declarant who had not filed Form-1 by 31 December 2024 would have slipped into column (4) from 1 January 2025 and paid the higher figure, which for a disputed-tax case is an extra 10 percentage points. The Circular pushed the column (3) window out by 31 days, so any declaration filed on or before 31 January 2025 still attracted the lower column (3) amount, and only declarations made on or after 1 February 2025 fell into column (4).

That one month mattered because the step between the columns is not trivial. For a new appellant with Rs 20,00,000 of disputed tax, the gap between column (3) at 100% and column (4) at 110% is Rs 2,00,000 of real cash. The Circular, in effect, preserved that saving for anyone who filed by 31 January 2025. To estimate your own regular tax exposure before weighing a settlement, the income tax calculator and the old vs new regime calculator are the quickest starting points.

Worked Example

Take a new appellant, Priya, whose appeal against an addition was filed in March 2023 (so after 31 January 2020). The disputed tax in her case is Rs 10,00,000, with disputed interest of Rs 1,50,000 attached to it. Because the dispute is one of disputed tax, that interest is not separately payable once the disputed tax is settled under the Scheme.

If Priya files Form-1 on 20 January 2025, she is inside the extended column (3) window created by Circular No. 20/2024 and pays 100% of the disputed tax: Rs 10,00,000. If she instead files on 5 February 2025, she falls into column (4) at 110% and pays Rs 11,00,000. The one-month extension is therefore worth Rs 1,00,000 to her, as the table makes explicit.

Had Priya been an old appellant whose appeal was pending on 31 January 2020, her column (3) rate would have been 110%, or Rs 11,00,000, and her column (4) rate 120%, or Rs 12,00,000, on the same Rs 10,00,000 of disputed tax. The mechanics are the same; only the percentage shifts with the appellant category. Note that the Scheme settles the tax dispute itself and is separate from your annual filing obligation, which you can model using the new regime calculator and understand through the self-assessment tax glossary entry.

Common Mistakes

The first and most common error was treating 31 December 2024 as the live cut-off after Circular No. 20/2024 had already shifted it to 31 January 2025. Some declarants rushed, and some advisers quoted the higher column (4) figure for January 2025 filings that in fact qualified for column (3). Always read the latest Circular: a section 97(2) direction overrides the date printed in the bare Scheme text.

A second recurring mistake was confusing the "amount payable" cut-off with the last date to file a declaration at all. The 31 January 2025 date governed only which rate column applied; it was not the final shutter on the Scheme. Declarations continued to be accepted after it, but at the column (4) rate. Readers often collapsed these two distinct dates into one.

Third, many declarants misclassified themselves as new appellants when their dispute had been pending on or before 31 January 2020, which understated the amount payable by a full 10 percentage points of disputed tax. On a Rs 10,00,000 dispute that is a Rs 1,00,000 shortfall, and the designated authority then issued a revised Form-3 to correct it, delaying the settlement. Check the filing date of your original appeal against the 31 January 2020 line before you compute.

Fourth, some taxpayers assumed the waived interest and penalty could still be carried as a loss or deduction elsewhere. They cannot: once a dispute is settled under DTVSV 2024, the matter is closed for that assessment year, and no part of the Rs 1,50,000-style waived interest in our example re-enters any other computation. For the meaning of the tax year a dispute attaches to, see the assessment year glossary entry.

FAQ

What did CBDT Circular No. 20/2024 actually change?

Issued on 30 December 2024 under section 97(2) of the Direct Tax Vivad Se Vishwas Scheme 2024, it extended the due date for determining the lower "amount payable" under column (3) of the section 90 Table from 31 December 2024 to 31 January 2025. Declarations filed on or before 31 January 2025 attracted the column (3) rate; those on or after 1 February 2025 attracted the higher column (4) rate.

When did the DTVSV 2024 Scheme come into force?

The Scheme took effect on 1 October 2024, having been enacted as part of the Finance (No. 2) Act 2024. Its stated purpose is to resolve pending income-tax disputes, and the full text sits on indiacode.nic.in alongside the parent Act.

What is the difference between a new appellant and an old appellant?

A new appellant filed the appeal, writ or special leave petition after 31 January 2020 and pays 100% of disputed tax under column (3). An old appellant had the dispute pending on or before 31 January 2020 and pays 110% under column (3), a 10 percentage-point premium that persists in column (4) at 120% versus 110%.

Does settling disputed tax also clear the interest and penalty?

Yes. Where the arrear is disputed tax, paying 100% or 110% of that tax under section 90 settles the dispute and the associated interest and penalty are waived. In the worked example, Rs 1,50,000 of disputed interest fell away once the Rs 10,00,000 disputed tax was paid.

Was 31 January 2025 the last date to join the Scheme?

No. The 31 January 2025 date set by Circular No. 20/2024 only governed which rate column applied. Declarations filed on or after 1 February 2025 were still accepted, but the amount payable moved to the higher column (4) figures in the section 90 Table.

Which form starts the DTVSV 2024 process?

The declarant files Form-1 to begin, the designated authority issues Form-3 determining the amount payable under section 90, and the declarant then pays and files proof. Misclassifying the appellant category at the Form-1 stage is what triggered revised Form-3 corrections during 2025.

How do I estimate my regular tax before considering a settlement?

Use the income tax calculator to project your normal liability and the capital gains calculator if the underlying dispute concerns capital gains. These model your ongoing tax position, which is distinct from the one-time disputed-tax amount settled under DTVSV 2024.