Vatsal Ponda
Income Declaration Scheme 2016
Basics
⇒ It shall come into force on 1st day of June 2016.
⇒ Any person may make on or after the date of commencement of this Scheme but before 30.09.2016 as notified by the Central Government in the Official Gazette vide notification no. 32/2016 dated: 19th May, 2016 , a declaration in respect of any income chargeable to tax under the Income-tax Act for any assessment year prior to the assessment year beginning on the 1st day of April, 2017 :
a. for which he has failed to furnish a return under section 139 of the Income-tax Act
b. which he has failed to disclose in a return of income furnished by him under the Income-tax Act before the date of commencement of this Scheme
c. which has escaped assessment by reason of the omission or failure on the part of such person to furnish a return under the Income-tax Act or to disclose fully and truly all material facts necessary for the assessment or otherwise.
⇒ Where the income chargeable to tax is declared in the form of investment in any asset, the fair market value of such asset as on the date of commencement of this Scheme shall be deemed to be the undisclosed income for the purposes of above provision.
⇒ No deduction in respect of any expenditure or allowance shall be allowed against the income in respect of which declaration under this section is
Charge of tax and surcharge
- The undisclosed income declared shall be chargeable to tax at the rate 30%.
- A surcharge of 25% over the tax rate mentioned which is to be called as Krishi Kallyan Cess shall be charged which comes to 7.5% (i.e. 30*25%).
Penalty
⇒ In addition to penalty and surcharge of 25% shall be charged in addition to tax and surcharge on such tax which comes to 7.5% (i.e. 30*25%).
Where the total Tax comes to 45% of the undisclosed income.
Tax, surcharge and penalty so levied shall be paid on or before a date to be notified by the Central Government, in case of failure the declarant shall be deemed never to have been made under this scheme and the undisclosed income shall be chargeable to tax under the Income-tax Act in the previous year in which such declaration is made.
Miscellaneous Provisions
- The provisions of the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) shall not apply in respect of the declaration of undisclosed income made in the form of investment in any asset, if the asset existing in the name of a benamidar is transferred to the declarant, being the person who provides the consideration for such asset, or his legal representative, within the period notified by the Central Government.
- Nothing contained in any declaration made shall be admissible in evidence against the declarant for the purpose of any proceeding relating to imposition of penalty, other than the penalty leviable in this scheme, or for the purposes of prosecution under the Income-tax Act.
- Where a declaration has been made by misrepresentation or suppression of facts, such declaration shall be void and shall be deemed never to have been made under this Scheme.
Non Applicability of Scheme to Certain Persons
The Provision of the Scheme shall not apply to the following:
1. To any person in respect of whom an order of detention has been made under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (52 of 1974):
Provided that—
(i) such order of detention, being an order to which the provisions of section 9 or section 12A of the said Act do not apply, has not been revoked on the report of the Advisory Board under section 8 of the said Act or before the receipt of the report of the Advisory Board; or
(ii) such order of detention, being an order to which the provisions of section 9 of the said Act apply, has not been revoked before the expiry of the time for, or on the basis of, the review under subsection (3) of section 9, or on the report of the Advisory Board under section 8, read with sub-section (2) of section 9 of the said Act; or
(iii) such order of detention, being an order to which the provisions of section 12A of the said Act apply, has not been revoked before the expiry of the time for, or on the basis of, the first review under subsection (3) of that section, or on the basis of the report of the Advisory Board under section 8, read with sub-section (6) of section 12A, of the said Act; or
(iv) such order of detention has not been set aside by a court of competent jurisdiction;
2. In relation to prosecution for any offence punishable under Chapter IX or Chapter XVII of the Indian Penal Code (45 of 1860), the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985), the Unlawful Activities (Prevention) Act, 1967 (37 of 1967) and the Prevention of Corruption Act, 1988 (49 of 1988).
3. To any person notified under section 3 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 (27 of 1992)
4. In relation to any undisclosed foreign income and asset which is chargeable to tax under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (22 of 2015).
5. in relation to any undisclosed income chargeable to tax under the Income-tax Act for any previous year relevant to an assessment year prior to the assessment year beginning on the 1st day of April, 2017
(i) where a notice under section 142 or sub-section (2) of section 143 or section 148 or section 153A or section 153C of the Income-tax Act has been issued in respect of such assessment year and the proceeding is pending before the Assessing Officer; or
(ii) where a search has been conducted under section 132 or requisition has been made under section 132A or a survey has been carried out under section 133A of the Income-tax Act in a previous year and a notice under sub-section (2) of section 143 for the assessment year relevant to such previous year or a notice under section 153A or under section 153C of the said Act for an assessment year relevant to any previous year prior to such previous year has not been issued and the time for issuance of such notice has not expired; or
(iii) where any information has been received by the competent authority under an agreement entered into by the Central Government under section 90 or section 90A of the Income-tax Act in respect of such undisclosed asset.
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