Haryana’s one-time tax waiver scheme offers up to 60% relief for small traders; check if you’re eligible

The Haryana government introduced a one-time settlement scheme (OTS) to offer tax relief and waive penalties for small traders struggling with pending tax disputes. The OTS Scheme for the Recovery of Outstanding Dues, 2025, which came into effect on April 7, is aimed at easing the burden of legacy tax dues and incentivising voluntary compliance.

Chief Minister Nayab Singh Saini claimed that under the scheme, taxpayers with disputes below Rs 10 lakh would only be required to pay 40 per cent of the outstanding amount. The government will waive the remaining 60 per cent. Additionally, full interest and penalty under any relevant section of the applicable tax laws will be written off.

For disputes ranging between Rs 10 lakh and Rs 10 crore, taxpayers must pay 50 per cent of the outstanding dues. In cases where dues exceed Rs 10 crore, the entire amount will have to be paid, though taxpayers will still be eligible for complete exemption on interest and penalties.

“This is a big relief for those who, due to various reasons, could not settle their dues earlier. We are also offering a rebate of up to Rs 1 lakh for those with cumulative tax dues up to Rs 10 lakh,” Saini said on March 23 while launching the scheme, which will remain open for 180 days.

Haryana govt tax settlement scheme: Who is eligible?

According to the Haryana GST Department’s circular issued on April 22, the scheme applies to quantified outstanding dues under the following seven acts, for the period up to June 30, 2017:

– The Haryana Value Added Tax Act, 2003  
– The Central Sales Tax Act, 1956  
– The Haryana Tax on Luxuries Act, 2007  
– The Haryana Entertainment Duty Act, 1955  
– The Haryana General Sales Tax Act, 1973  
– The Haryana Local Area Development Tax Act, 2000  
– The Haryana Tax on Entry of Goods into Local Areas Act, 2008

The scheme is open to all assessees — registered or unregistered — who have quantified outstanding dues under any of the above Acts.

 Haryana govt tax settlement scheme: Who is not eligible?

The following categories of taxpayers cannot avail the scheme:
– Those facing criminal proceedings under the relevant Acts  
– Those with demands related to erroneous refunds  
– Those whose application under the OTS Scheme 2023 has not been rejected by the appointed date  

However, ineligibility applies only for that specific year and Act for which the disqualification exists.

 Payment flexibility

Taxpayers are not required to pay the entire amount upfront. The scheme allows payments either in lump sum or in two instalments. The first instalment must be paid along with the application (Form OTS-1), while the second must be made within 60 days of receiving the interim order in Form OTS-4A.

The waiver of Rs 1 lakh on cumulative dues under Rs 10 lakh is a unique feature not applicable in higher slabs. Importantly, waivers will be separately calculated for each relevant Act.

The government has urged eligible taxpayers to take advantage of the limited-time window and clear their dues under relaxed conditions.