Belying gloomy predictions that it would prove a damp squib, the government on Saturday announced that 64,275 individuals have opted for the Income Declaration Scheme, 2016, and declared undisclosed income to the tune of R65,250 crore.
Belying gloomy predictions that it would prove a damp squib, the government on Saturday announced that 64,275 individuals have opted for the Income Declaration Scheme, 2016, and declared undisclosed income to the tune of R65,250 crore. This makes IDS the most successful among such schemes so far. On an average, nearly R1 crore was declared per person, much higher than R7 lakh in a 1997 scheme, which has hitherto been the most productive.
Finance minister Arun Jaitley said he expected the amount declared under IDS to be revised upwards once the final tabulation is completed.
The government would mop up R29,362 crore as tax and penalty from these declarations. Of this, 50% or R14,681 crore would be come to the Centre’s kitty in the current financial year, and the balance in 2017-18.
Under IDS, the window opened between June 1 and September 30, one can declare undisclosed domestic assets and pay 45% tax (30% tax, Krishi Kalyan cess of 25% on the tax and 12% penalty on 25% of the tax) to avoid any further probe or adverse action. The tax rate is lower than 60% levied in the 2015 foreign assets disclosure scheme, which nearly fell flat.
“This is not an immunity scheme where you pay the tax and get relief. In the IDS, declarants were supposed to pay tax plus penalty,” the finance minister told mediapersons in the national capital.
Jaitley, who had announced the IDS Scheme in his last Union Budget, said the response this time is far better compared with the scheme launched in 1997 by then FM P Chidambaram. At that time, undisclosed income worth R33,000 crore was declared and the Centre mopped up R10,000 crore as tax.
“The scheme launched in 1997 had asked only to pay tax and that, too, value of assets were considered 10 years back. This means the real rate of tax on a 10-year-old value becomes very less. We did not want that non-complaint individuals get a better deal than tax-complaint individuals. That would have been a discrimination against the tax-complaint persons. Under the 1997 scheme, the non-complaint were paying much less,” Jaitley reiterated.
The Modi government unearthed black money/ undisclosed income to the tune of R87,300 crore during the past more than two years. These include: R8,000 crore assessments and 164 prosecutions on the individuals named in the HSBC list, R5,000 crore and 55 prosecutions in the accounts provided by International Consortium of Investigative Journalists, R56,378 crore un-detected income unearthed by the IT department, R1,986 crore actual cash seizure in searches and another R16,000 crore has been received from non-filers of IT returns. In addition, Jaitley said 250 references has been shared with other countries based on the information of the Panama papers.