What is the Voluntary settlement scheme?

Why in News:

• The budget 2023-24 has proposed a scheme for settling contractual dispute named Vivad se Vishwas II (Settling Contractual Disputes).

About Voluntary settlement scheme:

• It is introduced to settle contractual disputes of government and government undertakings; wherein arbitral award is under challenge in a court.
• This will be done by offering graded settlement terms depending on pendency level of the dispute.
• Under the scheme, 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 full waiver on 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.