Income Declaration Scheme was announced by the Government in its Finance Bill, 2016 with an objective to attract the tax payers and tax evaders to disclose their undisclosed or unaccounted Income and Assets. The scheme allows people to reveal their taxable income/assets, if not declared properly in the past years so as to be able to avail its benefits.
The eligibility criterion under the scheme includes, all the persons, as defined under Income Tax Act 1961, provided:-
- They fail to furnish the tax return as specified under Section 139 of the Act.
- They have previously failed to disclose the income properly in the respective income tax returns.
- They have escaped assessment or disclosure of material facts, truthfully as well as completely, by omission or by reason of failure.
Person not covered under the Income Declaration Scheme 2016 doesnâ€™t include persons:-
- If they have been served/issued any notice U/s 142(1)/ 143(2)/148/153(A)/153(C);
- In case, there is any conduct of search/survey and the time of issuance of any notice under any specific provision under the Act is still open.
- If there is any acknowledgement or receipt of any information under an agreement with foreign countries with regard to such income.
- If the personâ€™s cases are covered under the certain specified Acts.
In cases of the undisclosed income to be taxed has been invested in assets, then the Income Declaration Scheme, 2016 provides for taking into consideration the reasonable market value of the asset acquired through that income as on 1st June 2016 will be deemed to be an unrevealed income for tax purposes.
The duration of the Income Declaration Scheme, 2016 is 4 months starting from 1st June 2016 to 30th September 2016.
The person making a declaration would be entitled to make a payment of a total tax of 45%(tax upto 30% + 25%of tax as surcharge + 25% of tax as Krishi KalyanCess) of the value of his/her declared undisclosed income. The period of filing declaration would be on and before 30th September 2016 whereas the period of making tax payment is on or before 30th November 2016.
A declarant can enjoy the immunity from prosecution under IT Act, Wealth Tax Act and Benami Transactions(Prohibition) Act,1988 subject to certain minor conditions. Additionally, there will be no enquiry or scrutiny, as specified under IT Act or Wealth Tax Act, in consideration to their declaration under the scheme. The best part is that the penalty is just 25% in comparison to 100-300% under IT Act.
There are excellent tax lawyers in Delhi, Mumbai, Chennai, Bangalore, Hyderabad, Pune, Goa, Kolkata, Ahmedabad, Gurgaon or Noida, who can help in the proceedings and with details of latest Income Declaration Scheme by the Government.