Introduction: Discover the history and impact of Income Disclosure Schemes (IDS) implemented by the Government of India. This article explores the Income Declaration Scheme, 2016 (IDS, 2016), the Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana (PMGKY Scheme), the revenue generated, and the potential for introducing similar schemes in the future.
Analysis: In June 2016, the Income Declaration Scheme, 2016 (IDS, 2016) was introduced, providing individuals the opportunity to disclose undisclosed income. Under this scheme, taxes were to be paid at 30% of the undisclosed income, along with surcharge (Krishi Kalyan Cess) at 25% of taxes payable and a penalty at 25% of taxes payable, resulting in a total payment of 45% of the undisclosed amount. Subsequently, the Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana (PMGKY Scheme) was launched in December 2016. This scheme allowed individuals to declare undisclosed income by paying taxes at 30%, surcharge at 33%, and a penalty at 10%, totaling 50% of the undisclosed income. Additionally, 25% of the undisclosed income had to be invested in specific instruments with a four-year lock-in period.
The revenue generated from these schemes is significant, with IDS, 2016 contributing Rs. 23,672 Crores and the PMGKY Scheme contributing Rs. 2,474 Crores. These amounts are credited to the Consolidated Fund of India, used to fund various government expenditures, including infrastructure development, welfare programs, grants to state governments, and more.
While there is currently no proposal to introduce a new Income Disclosure Scheme, suggestions to revisit such schemes are considered during the annual budgetary exercise. Public representatives have expressed interest in exploring the potential benefits of future schemes.
Conclusion: The Income Disclosure Schemes have played a role in encouraging individuals to disclose undisclosed income and contribute to government revenue. The success of these schemes underscores the government’s commitment to addressing undisclosed income and bolstering resources for development initiatives. As discussions continue, potential future schemes could provide an additional avenue for individuals to contribute to the nation’s growth and development.
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GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
LOK SABHA
UNSTARRED QUESTION NO. 2951
TO BE ANSWERED ON MONDAY, AUGUST 07, 2023 / SRAVANA 16,1945 (SAKA)
INCOME DISCLOSURE SCHEME
2951. SHRI GOPAL CHINNAYA SHETTY:
Will the Minister of FINANCE be pleased to state:
(a) whether the Government had announced an Income Disclosure Scheme in November, 2016 to convert black money into white under which any person could disclose his black money with a penalty of 50 per cent;
(b) if so, the details of the amount of revenue the Government received under this scheme and details of schemes on which this amount was spent;
(c) whether the Government has any plan to introduce a scheme to convert the black money lying in the country into white with a certain penalty, so that the money received from the black money penalty can be used for the developmental work of the country;
(d) whether the Government has also received requests in this regard from public representatives in May, 2023;
(e) if so, the details thereof; and
(f) the action taken or likely to be taken by the Government in this regard?
ANSWER
THE MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) No such scheme was announced in November, 2016. However, Income Declaration Scheme, 2016 (IDS, 2016) was enacted through the Finance Act, 2016 and came into force on 01st June 2016. According to the provisions of the IDS,2016, any person could declare his/her undisclosed income by making the payment of taxes at 30% of the undisclosed income, surcharge (i.e., Krishi Kalyan Cess) at 25% of taxes payable and penalty at 25% of taxes payable. In total, undisclosed income could be declared by making the payment of 45% of the undisclosed amount under IDS,2016.
After Demonetization on 8th November 2016, Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana (PMGKY Scheme) was launched on 16th December 2016 to provide another opportunity to declare the undisclosed income by making the payment of taxes at 30% of the undisclosed income, surcharge at 33% of the taxes payable and penalty at 10% of the undisclosed income. In total, undisclosed income could be declared by making the payment of 50% of undisclosed income. Further, 25% of the undisclosed income was required to be invested in specific instruments with lock-in period of four years.
(b) Under IDS,2016 and PMGKY Scheme, the amount of revenue received are Rs. 23,672 Crores and Rs.2,474 Crores, respectively.
In terms of Article 266 (1) of the Constitution of India, all revenues (tax/ non-tax etc.) received by the Government of India are credited to the Consolidated Fund of India. Amount from Consolidated Fund of India is utilized by obtaining necessary appropriation from Parliament to meet various expenditures of the Government such as infrastructure development, health, education and other welfare schemes, Grant-in-aid to State/ UT governments, interest payments on loans taken by the Government etc.
(c) There is no such proposal.
(d) (e) & (f) One proposal was received suggesting that this Scheme may again be introduced. Such proposals are examined as part of annual budgetary exercise.
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