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Now Is The Time To Disclose Your Undisclosed Income!
Honble Finance Minister, Arun Jaitley introduced "The Income Declaration Scheme 2016" whereby an opportunity has been provided to persons to come forward and declare their undisclosed income and pay tax, surcharge and penalty at the specified in the Scheme. This can be termed as an opportunity to the people who have not yet disclosed the income to the income tax department.
Salient Features of the Scheme:
- A Person may make the declaration in respect of undisclosed income from 1st June, 2016 to 30th September, 2016 and payments towards taxes, surcharge & penalty can be made latest by 30th November, 2016.
- Undisclosed income upto FY 2015-16 can be declared.
- Where income is declared in the form of investment in any asset , the fair market value of such asset as on the date of commencement of scheme (i.e. 1st June, 2016), shall be deemed to be undisclosed income.
- Charge of Tax, Surcharge and Penalty: Income Tax at 30%, and surcharge (to be called the Krishi Kalyan cess) @25% of the tax payable i.e. 7.5% and penalty @25% of tax Payable i.e at 7.5%, which is a total of 45% of the undisclosed income.
- Normally, there will be minimum 100% penalty of tax amount along with huge interest liability. Thus, by adopting this scheme, you need to pay @ 45 % tax on your income instead of @ 60% of your income + interest + prosecution consequences.
- Declaration of undisclosed income shall be made to the Principal Commissioner or the Commissioner in the prescribed form and shall be signed by the declarant or any other eligible person on his behalf.
- If declarant fails to pay tax, surcharge and penalty, the declaration filed by the person shall be deemed never to have been made under this scheme. Non-payment of Tax, Surcharge and Penalty up to the date so notified shall render the declaration made under the scheme void.
- In cases where any declaration has been made but no tax and penalty referred to the scheme have been paid within the time specified, the undisclosed income shall be chargeable to tax under the Income-tax Act in the previous year in which such declaration is made.
- Declarations made under the scheme shall be exempt from wealth-tax in respect of assets specified in the declaration. Also, there will be no scrutiny and enquiry under the Income-tax Act and Wealth-tax Act in respect of such declarations. Further, immunity from prosecution under such Acts will be provided.