New scheme to tackle black money menace- Income declaration scheme

• What is the scheme – Income declaration scheme
• How –
• Who is eligible –
• Who is not eligible
• Issue

What is the scheme – Income declaration scheme

• A limited-period Compliance Window to declare undisclosed income or income represented in the form of any asset and clear up their past tax transgressions
• The scheme provides immunity from wealth tax, scrutiny and prosecution and from the Benami Transaction Act
• The scheme will be kept open for four months from June 1.

How –

• by paying tax at 30 per cent,
• Krishi Kalyan surcharge at 7.5 per cent and
• penalty at 7.5 per cent
• ie. a total of 45 per cent of the undisclosed income.

Who is eligible –

• for domestic taxpayers
• Undisclosed income of any financial year up to 2015-16 can be brought overground through this window.

Who is not eligible

• People who have received notices under Sections 142 (1), 143 (2), 148, 153A or 153C of the Income Tax Act are not eligible to disclose previously concealed income.
• Cases where a search or survey has been conducted and the time for issuance of notice under the relevant provisions of the Act has not expired
• Cases where information is received under an agreement with foreign countries regarding such income
• Cases covered under the Black Money Act, 2015
• Persons notified under Special Court Act, 1992,
• Cases covered under Indian Penal Code, the Narcotic Drugs and Psychotropic Substances Act, 1985, the Unlawful Activities (Prevention) Act, 1967, and the Prevention of Corruption Act, 1988.

Issue

• Experts believe this may prove a dampener for the scheme.This could be a dampener for the scheme as it would exclude potential disclosures from people who received notices seeking a regular explanation on the returns they had filed
• Usually, many cases, especially of high net worth individuals, are picked up mechanically for scrutiny and notices are issued. Some notices are issued on the basis of returns filed by the taxpayer, and are not necessarily linked to undisclosed income.