Effect of higher returns for the assessment year 1986-87 in respect of wealth-tax assessments – The Finance Act, 1985 has rationalised the rates of personal income-tax and corporate tax and has also liberalised the provisions of the Wealth-tax Act considerably. Taxpayers liable to wealth-tax should avail of this opportunity to come forward and file returns of wealth showing their true net wealth irrespective of what they might have done earlier. They need not have any apprehension that they will be subject to penalty or prosecution so long as they come forward suo motu before detection by the department. Similarly, where for earlier years there has been any suppression of assets or undervaluation of assets for the purposes of wealth-tax the taxpayers would be well advised to come forward and disclose such undervaluation or suppression now to the Commissioner whether the wealth-tax assessments for those years are pending or completed. They will, of course, have to pay wealth-tax on those assets at the rates applicable to those years, but will not be subject to any penalty or prosecution. Taxpayers would appreciate that this liberal attitude on the part of the Government should elicit response from the wealth-tax payers within a reasonable time and cannot be expected to continue for all time to come. Such immunity from penalty and prosecution will be available only to such persons who come forward and show their true wealth and pay tax thereon by March 1986.
Circular: No. 439 [F. No. 225/86/85-IT(A-II)], dated 15-11-1985.