All You Need to Know about The Income Declaration Scheme 2016
The Income Declaration Scheme, 2016 incorporated as Chapter IX of the Finance Act 2016 provides an opportunity to all persons who have not declared income correctly in earlier years to come forward and declare such undisclosed income(s).
Through this scheme the finance minister aims to bring black money into books of accounts. Under the Scheme, such income as declared by the eligible persons, would be taxed at the rate of 30% plus a 'Krishi Kalyan Cess' of 25% on the taxes payable and a penalty at the rate of 25% of the taxes payable, thereby totalling to 45% of the income declared under the scheme.
Such a scheme was also earlier launched in 1997 and was called VDIS (Voluntary Disclosure of Income Scheme). The new scheme shall remain in force for a period of 4 months from 1st June, 2016 to 30th September, 2016 for filing of declarations and payments towards taxes, surcharge and penalty must be made latest by 30th November, 2016. Declarations can be filed online or with the jurisdictional Pr. Commissioners of Income-tax across the country.
1.
The
scheme
shall
apply
to
undisclosed
income
whether
in
the
form
of
investment
in
assets
or
otherwise,
pertaining
to
Financial
Year
2015-16
or
earlier.
2.
Where
the
declaration
is
in
the
form
of
investment
in
assets,
the
Fair
Market
Value
of
such
asset
as
on
1st
June
2016
shall
be
deemed
to
be
the
undisclosed
income
under
the
Scheme.
However,
foreign
assets
or
income
to
which
the
Black
Money
Act
2015
applies
are
not
eligible
for
declaration
under
this
scheme.
3.
Assets
specified
in
the
declaration
shall
be
exempt
from
Wealth
tax.
4.
No
Scrutiny
and
enquiry
under
the
Income-tax
Act
or
the
Wealth
tax
Act
shall
be
undertaken
in
respect
of
such
declarations.
5.
Immunity
from
prosecution
under
the
Income-tax
Act
and
Wealth
Tax
Act
is
also
provided
along
with
immunity
from
the
Benami
Transactions
(Prohibition)
Act,
1988
subject
to
transfer
of
asset
to
actual
owner
within
the
period
specified
in
the
Rules.
6.
Non-payment
of
total
taxes,
surcharge
and
penalty
in
time
or
declaration
by
misrepresentation
or
suppression
of
facts
shall
render
the
declaration
void.
7.
The
circumstances
in
which
the
Scheme
shall
not
apply
or
where
a
person
is
held
to
be
ineligible
are
specified
in
section
196
(Chapter
IX)
of
the
Finance
Act,
2016.
8.
Non
declaration
of
undisclosed
income
under
the
Scheme,
will
render
such
undisclosed
income
liable
to
tax
in
the
previous
year
in
which
it
is
detected
by
the
Income
tax
Department.
Other
penal
consequences
will
also
follow
accordingly.
The full text of the Scheme is available on the departmental website www.incometaxindia.gov.in for viewing. The relevant rules and forms for the same are to be notified shortly.