Modi government has been under immense pressure to implement its poll promise of going after ‘kaala dhan’. With this purpose, first it launched the undisclosed foreign income and assets scheme, which saw a muted response. Now the government has announced another scheme for taxpayers to come clean on their unaccounted income & assets. Let’s take a look at the features of the scheme.
- The income tax declaration scheme, 2016 opens from 1st June 2016.
- There is a 4 month window, from 1st June 2016 to 30th September 2016, during which taxpayers can declare their unaccounted income & assets to the tax department.
- A total tax of 45% shall have to be paid on such income (inclusive of cess).
- This tax must be deposited by 30th November 2016.
- The scheme is applicable for undisclosed incomes of that belongs to FY 2015-16 or before.
- If the declaration is in the form of investment in assets, the FMV (fair market value) of such assets as on 1st June 2016 shall be considered as undisclosed income of the taxpayer.
- This scheme is not applicable for undisclosed foreign assets & incomes, which shall continue to be taxed as per the undisclosed foreign income & assets bill of 2015.
- Wealth tax is not applicable and not required to be paid on undisclosed assets under this scheme.
- No scrutiny or enquiry shall be done for these declarations.
- Taxpayer shall not be prosecuted, under income tax or wealth tax or benami transactions act.
- Non-declaration of income under this scheme, when detected shall be taxed in the year according to the rules of the year in which it is detected. Other penal provisions shall apply.