I-T dept modiifies Samadhan scheme

The release added that where the partners are otherwise eligible for KVSS in respect of their other disputed income,8217; they may also file declaration for such income along with that of the firm. They will have to pay taxes separately at the current rate of 30 per cent of such other disputed income as provided in the scheme. Those partners who have separately filed declarations already may now file revised declarations along with the firm, chief commissioner of Income-Tax J M Mehra stated.

The changes were made after a number of representations were made to the Income-Tax department. KVSS provides for payment of tax at the current rate of 35 per cent of the disputed income in case of firms. Under the existing provisions, the firm is required to pay normal taxes at 35 per cent and the partners are not required to pay any further tax on their shared income.

However prior to the assessment year 1993-94, the firm was paying taxes at concessional rate varying from four per cent to 24 per cent and the partners paid tax on their income at the rates applicable. As a result, firms assessed to tax for assessment year 1992-93 and earlier years which wished to avail KVSS, were at a disadvantage vis-a-vis other assesses. The representations pointed out the anomaly after which the Government decided to make changes in the KVSS which closes on December 31.