Govt's 4-month window for black money holders to open on 1 June
16 May 2016
The government will open a special window on 1 June to facilitate holders of unaccounted cash to declare their income and come clean by paying a 45-per cent tax and penalty. The scheme will remain open for a four-month period and the declarations will not be subject to scrutiny and enquiry by the tax department.
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), says a finance ministry release.
Under the scheme, such income as declared by the eligible persons, would be taxed at the rate of 30 per cent plus a 'Krishi Kalyan Cess' of 25 per cent on the taxes payable and a penalty at the rate of 25 per cent of the taxes payable, adding up to 45 per cent of the income declared under the scheme.
The scheme will remain in force for a period of four months from 1 June, 2016 to 30 September, 2016 for filing of declarations. Payment of taxes, surcharge and penalty must be made latest by 30 November, 2016. Declarations can be filed online or with the jurisdictional Principal Commissioners of Income-tax across the country.
The scheme will apply to undisclosed income whether in the form of investment in assets or otherwise, pertaining to financial year 2015-16 or earlier.
Where the declaration is in the form of investment in assets, the fair market value of such asset as on 1 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.
Assets specified in the declaration will be exempt from wealth tax. No scrutiny and enquiry under the Income-tax Act or the Wealth Tax Act will be undertaken in respect of such declarations.
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.
Non-payment of total taxes, surcharge and penalty in time or declaration by misrepresentation or suppression of facts shall render the declaration void.
The circumstances in which the scheme will not apply or where a person is held to be ineligible are specified in section 196 (Chapter IX) of the Finance Act, 2016.
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.