Budget 2016 | Undisclosed asset declaration: Window for domestic taxpayers

The window under this Income Disclosure Scheme will be opened from June 1 to Sept 30, 2016.

Written by Aanchal Magazine | New Delhi | Updated: March 1, 2016 8:32 am
The NIA claims it has evidence to prove the deal was struck and the money transferred to Chinese firm through Willy Naru. (Source: Reuters) In his Budget speech for 2016-17, finance Minister Arun Jaitley proposed a four-month compliance window for domestic taxpayers for undisclosed income from any asset. (Source: Reuters)

After the introduction of a compliance window for overseas undisclosed assets last year, the government on Monday announced a similar “limited period” compliance window for domestic taxpayers. In his Budget speech for 2016-17, finance Minister Arun Jaitley proposed a four-month compliance window for domestic taxpayers for undisclosed income from any asset and clearing up past transgression by paying tax at 30 per cent, a surcharge at 7.5 per cent, a penalty at 7.5 per cent, which is total of 45 per cent of undisclosed income.

“There will be no scrutiny or enquiry regarding income declared in these declarations under the Income Tax Act or the Wealth Tax Act and the declarants will have immunity from prosecution. Immunity from

Benami Transaction (Prohibition) Act, 1988 is also proposed subject to certain conditions. The surcharge levied at 7.5 per cent of undisclosed income will be called Krishi Kalyan surcharge to be used for agriculture and rural economy,” Jaitley said.

Watch: The Big Picture Of Arun Jaitley’s Budget 2016

The window under this Income Disclosure Scheme will be opened from 1st June to 30th September, 2016 with an option to pay amount due within two months of declaration, he added.

The finance minister added that the government is “fully committed” to remove black money from the economy.

Share This Article
Share
Related Article

“Having given one opportunity for evaded income to be declared once, we would then like to focus all our resources for bringing people with black money to books,” he said.

Jaitley, however, clarified that the four-month compliance window for domestic taxpayers is neither an amnesty scheme nor Voluntary Disclosure of Income Scheme (VDIS).

page 18In an interview to Doordarshan News, Jaitley said, “Inequality arises in amnesty, where under certain exemptions, you as a honest tax payer has paid 30 per cent and I come and join after 20 years and say that I would also pay 30 per cent.”

He added amnesty is the VDIS introduced in the past and the present scheme is not structured that way.

In 1997, then finance minister Chidambaram in his Budget speech had said that high tax rates were one of the important reasons for tax evasion. The government’s figures had then showed that there were just 12 million tax assesees, and only 12,000 taxpayers whose annual income topped Rs 10 lakh. The VDIS was introduced in 1997 with a compliance period was of six months. The tax payable on the declared amount was at the rate of 35 percent in the case of companies and firms, and 30 percent in the case of others. Under the VDIS, irrespective of the year or nature or source of funds, the amount disclosed, either as cash, securities or assets, whether in India or abroad, was to be charged at the highest tax rate and 77.5 per cent of the proceeds from the VDIS were to accrue to state governments, while the share of the central government was earmarked for financing the basic minimum services programme, and building infrastructure.

Last year, the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 was enacted to pursue black money stashed overseas. The Act levies tax at the rate of 30 per cent on any undisclosed foreign income and assets held abroad by a person who is ordinarily resident in India. The Act also provides for a penalty equivalent to three times the value of tax, taking the total tax exposure to as high as 120 per cent along with a provision for imprisonment for a maximum term of 10 years. Last year, the government had said the total disclosures under the compliance window for foreign assets was 638 while the total illegal foreign assets disclosed were worth Rs 4,147 crore, which was later revised to 644 declarations for black money.

For all the latest Business News, download Indian Express App

  1. No Comments.