The Income Declaration Scheme, 2016 (the Scheme) provides an opportunity to persons who have not paid full taxes in the past to come forward and declare their undisclosed income and assets. Income Declaration Scheme Rules, 2016 (the Rules) were notified on 19.5.2016. Representations have been received from various stakeholders to provide an option to value the immoveable property on the basis of the registered value. After due consideration of the representations, the Rules have been amended to provide that where acquisition of an immovable property is evidenced by a registered deed, an option shall be available with the declarant to declare the fair market value of such property by applying the cost inflation index to stamp duty value of the property.

F.No. 142/8/2016-TPL

New Delhi, the 17th August, 2016

Notification No. 74/2016-Income Tax

S.O._______- In exercise of the powers conferred by sub-section (1) and subsection (2) of section 199 of the Finance Act, 2016 (28 of 2016), the Central Board of Direct Taxes, makes the following rules further to amend the Income Declaration Scheme Rules, 2016 (hereinafter referred to as the principal rules) namely:-

1. (1) These rules may be called the Income Declaration Scheme (Third Amendment) Rules, 2016.

(2) These rules shall come into force from the date of their publication in the Official Gazette.

2. In the principal rules, in rule 3, in sub-rule (1), in clause (d), after sub-clause (II) following shall be inserted, namely:-

‘Provided that where the acquisition of immovable property by the declarant is evidenced by a deed registered with any authority of a State Government, the fair market value of such property shall, at the option of the declarant, may be taken on the stamp duty value as increased by the same proportion as Cost Inflation Index for the year 2016-17 bears to the Cost Inflation Index for the year in which the property was registered:

Provided further that where the immovable property was acquired before the 1st day of April, 1981, the provisions of the first proviso shall have effect as if for the words “stamp duty value”, the words “the fair market value of the property as on 1st day of April, 1981 on the basis of the valuation report obtained by the declarant from a registered valuer”, and for the words “Cost Inflation Index for the year in which the property was registered”, the words “Cost Inflation Index for the year 1981-82” had been substituted.

Explanation– For the purposes of this clause,-

(i) “stamp duty value” means the value adopted or assessed by any authority of the State Government for the purposes of payment of stamp duty in respect of an immovable property;

(ii) “Cost Inflation Index” means such index as notified under clause (v) of Explanation to section 48 of the Income-tax Act, 1961.’

3. In the principal rules, in Annexure to Form-1,-

(A) in serial number III, for item number 1, the following item shall be substituted, namely:-

“1. Immovable property (attach valuation report)

(i) Nature of property (land/building/flat etc.) ________________

(ii) Address of the property ________________

(iii) Name(s) under which held ________________

(iv) Date of acquisition ________________

(v) Cost of acquisition as per rule 3(1)(d)(I) ________________

(vi) Value as estimated by the registered valuer ________________
on 1st June, 2016 as per rule 3(1)(d)(II)

(vii) Value as per proviso to Rule 3(1)(d)

Identification number and date of the registered deed Value adopted for stamp duty, if property is acquired on or after 01.04.1981 Fair market value as on 01.04.1981, if property acquired before 01.04.1981 Indexed value of the property as on 01.06.2016

(viii) Fair market value as per rule 3 ________________”;

(B) after serial number IV, the following shall be inserted, namely:-

“V. Whether any part of income referred in (I) is in the form of fictitious liability YES/NO

VI. If reply to (V) is Yes, whether such liability is directly linked to any asset disclosed in the balance sheet YES/NO

VII. If reply to (VI) is No, furnish the following:

1. Nature of liability _____________

2. Financial year in which the liability was created _____________

3. Amount of liability ___________”

(Dr. T.S. Mapwal)

Under Secretary to the Government of India

Note:- The principal rules were published vide notification number S.O.1831(E) dated the 19th May, 2016 and last amended vide notification number S.O. 2705 (E) dated the 12th August, 2016.

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