Imp Notifications &Clarifications On The Income Declaration Scheme, 2016

The Ministry of Finance has issued a Notification dated 19th May 2016 enacting “The Income Declaration Scheme Rules, 2016”which are to come into force on 1st June 2016. The Ministry of Finance has issued another notification dated 19th May 2016 specifying the relevant dates for making the declaration and making payment of the tax etc. The CBDT has issued Circular No. 16 dated 20.05.2015 setting out the “Explanatory Notes On provisions Of The Income Declaration Scheme, 2016 As Provided In Chapter IX Of The Finance Act 2016“. The CBDT has also issued Circular No. 17 of 2016 by which it has provided “Clarifications on the Income Declaration Scheme, 2016”.


PRESS RELEASE

New Delhi, 14th May, 2016

Subject: The Income Declaration Scheme 2016 to open from 1st June 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).

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. The 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 &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.

• 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.

• 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.

• Assets specified in the declaration shall be exempt from Wealth tax.

• No Scrutiny and enquiry under the Income-tax Act or the Wealth tax Act shall 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 &penalty in time or declaration by misrepresentation or suppression of facts shall render the declaration void.

• 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.

• 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.


3 comments on “Imp Notifications &Clarifications On The Income Declaration Scheme, 2016
  1. bobjee kurien says:

    Please bear in mind of the earlier schemes where diamonds and gold was declared and taxes paid in the said items wereon a specified date.these were sold at Mumbai and suratand the gains were offered to tax at a low rate.Most of the sales were bogus which permitted assessees to escape tax.Honest assesseeshave to bear the brunt of taxation because they declare the income and pay tax in time .On the other hand by bringing these the Government is encouraging tax evaders and accepting their inefficiency (through acts of ommision and corrupt dubious descretionary powers) of the authorites)
    I am of the firm opinion that the amnesty schemes need to be stopped forth with to encourage honest tax payers .We have had these schemes comming up at regular intervals.What does it indicate? The Governments inefficiency and political interference in tax matters .Stop this nonsence.The successive Governments have fooled people .The NDA goverment has fallen a prey to the bureaucracy s slimy way of appeasing the political ends of the politicians.please catvh the high and mighty to show the steely mettle of good governance.you can then be sure of acche din.Remember the picture the invincibles.It was the hard honest work of a few honest income tax officials who brought the mafia to their knees in USA

  2. Ashwani Joshi says:

    The levy of 25% of penalty may deter the declarants and they may opt for a second thought. The provision regarding adoption of fair market value as on June 1, 2016, may give rise to multifarious litigation regarding actual value. Primarily the scheme seems to be a tactic to cover the inefficiency of the department to catch the tax evaders. And then the statement ”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”is futile, because its always so under the Act.On the whole the scheme is not attractive for repentant or rueful tax evader. I don’t see extraordinary enthusiasm or response.

  3. Ashwani Joshi says:

    The levy of 25% of penalty may deter the declarants and they may opt for a second thought. The provision regarding adoption of fair market value as on June 1, 2016, may give rise to multifarious litigation regarding actual value. Primarily the scheme seems to be a tactic to cover the inefficiency of the department to catch the tax evaders. On the whole the scheme is not attractive for repentant or rueful tax evader. I don’t see extraordinary enthusiasm or response.

2 Pings/Trackbacks for "Imp Notifications &Clarifications On The Income Declaration Scheme, 2016"
  1. […] regard to The Income Declaration Scheme, 2016, the CBDT had earlier Circular No. 17 of 2016 dated 20th May, 2016 and Circular No. 24 of 2016 […]

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