Fear of taxman? Here’s what taxpayers must focus on

By: | Updated: June 25, 2016 8:55 AM

The finance ministry has directed I-T officials to intensify the efforts to make the Income Declaration Scheme (IDS) successful.

taxUnder IDS, individuals can declare domestic assets which have not been accounted for by the I-T department so far for tax purpose.

The finance ministry has directed I-T officials to intensify the efforts to make the Income Declaration Scheme (IDS) successful. The scheme opened on June 1 and will remain in force till December 31. To ensure the confidentiality of the disclosures and for a hassle-free exercise, the tax payer opting for the scheme would get a single-window facility at the level of principal commissioner or commissioner of income tax.

The CBDT strategy note on IDS emphasises on the importance of ‘confidentiality’ and orders a single contact point for the declarant. The principal commissioner or commissioner of income tax should be the “one and only point of contact” with respective declarant, while “all the procedural facilities, as required, should be provided at his stage only so as to avoid the requirement of any additional interaction with anyone else in the office…”, the CBDT said.

Under IDS, individuals can declare domestic assets which have not been accounted for by the I-T department so far for tax purpose. Taxpayers can avail themselves of immunity from penalty and prosecution by paying 45% of the value of the assets This includes tax rate of 30% plus Krishi Kalyan Cess and penalty.

Also Read: Relief on income: No retro applicability of GAAR

“I do not see many people coming forward to declare under the scheme since there is immunity only under the I-T Act and the Wealth Tax Act. The person declaring will have the fear of being hauled up under other laws. There are a plethora of laws under which they may be questioned by authorities. That fear will be there,” said Amit Maheshwari, partner at Ashok Maheshwary & Associates.

A similar scheme launched for foreign assets received timid response. Last time, Rs 4,147 crore of undisclosed wealth was declared during the 90-day foreign black money compliance window that ended September 30, 2015.

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