Union Budget 2016: If you have been a tax evader in the past and are worried that the taxman will come knocking, you can now come clean and declare your income, pay 45 per cent to the authorities and relax.
If you have been a tax evader in the past and are worried that the taxman will come knocking, you can now come clean and declare your income, pay 45 per cent to the authorities and relax.
As per Finance Minister Budget speech, the Income Declaration Scheme, 2016 would provide “an opportunity to persons who have not paid full taxes in the past to come forward and declare the undisclosed income and pay tax, surcharge and penalty totalling in all to 45 per cent of such undisclosed income declared.”
The scheme is proposed to be made applicable in respect of undisclosed income of any financial year upto 2015-16.
The scheme will come into effect from June 1, 2016 and will remain open up to the date to be notified by the central government.
The Finance Ministry has said that tax is proposed to be charged at the rate of thirty per cent on the declared income as increased by surcharge at the rate of twenty five per cent of tax payable (to be called the Krishi Kalyan cess). “A penalty at the rate of twenty five per cent of tax payable is also proposed to be levied on undisclosed income declared under the scheme,” the Budget papers say.
However, cases that would not be considered for this amnesty are where notices have been issued under section 142(1) or 143(2) or 148 or 153A or 153C, where a search or survey has been conducted and the time for issuance of notice under the relevant provisions of the Act has not expired, where information is received under an agreement with foreign countries regarding such income, cases covered under the Black Money Act, 2015, persons notified under Special Court Act, 1992, cases covered under Indian Penal Code, the Narcotic Drugs and Psychotropic Substances Act, 1985, the Unlawful Activities (Prevention) Act, 1967, the Prevention of Corruption Act, 1988.
It has been that payment of tax, surcharge and penalty may be made on or before a date to be notified by the Central Government in the Official Gazette and non-payment up to the date so notified shall render the declaration made under the scheme void.
Declarations made under the scheme shall be exempt from wealth-tax in respect of assets specified in declaration. No scrutiny and enquiry under the Income-tax Act and Wealth-tax Act will be undertaken in respect of such declarations and immunity from prosecution under such Acts will be provided.
However, declarations under the scheme made by misrepresentation or suppression of facts will be treated as void.