Income Tax Dept gives four months to declare undisclosed income

The Income Tax Department has given four months period for people to declare their undisclosed incomes and pay tax on it.

According to a statement issued by the department, “The Income Declaration Scheme provides an opportunity to all persons who have not declared income correctly in earlier years to come forward and declare such undisclosed income.”

It further said, “The scheme shall remain in force for a period of 4 months from 1st June, 2016 to 30th September, 2016 for filing of declarations and payments towards taxes, surcharge & penalty must be made latest by 30th November, 2016.”

Under the Scheme, such income as declared by the eligible persons, would be taxed at the rate of 30% plus a‘Krishi Kalyan Cess’ of 25% on the taxes payable and a penalty at the rate of 25% of the taxes payable, thereby totalling to 45% of the income declared under the scheme.

Exceptions

Investment in foreign assets or income to which the Black Money Act 2015 applies are not eligible for declaration under this scheme.

Where the declaration is in the form of investment in assets, the Fair Market Value of such asset as on 1st June 2016 shall be deemed to be the undisclosed income under the Scheme.

Benefits

The Income Declaration Scheme provides for all assets specified in the declaration to be exempted from Wealth tax.

These assets will not be subject to scrutiny and enquiry under the Income-tax Act or Wealth tax.

Immunity from prosecution under the Income-tax Act and Wealth Tax Act is also provided along with immunity from the Benami Transactions (Prohibition) Act, 1988 subject to transfer of asset to actual owner within the period specified in the Rules.

Consequences for non-compliant behaviour

If taxes, surcharge and penalty have not been paid in time or if they are declared by misinterpretation or suppression of facts will render the declaration void.

Non declaration of undisclosed income under the Scheme, will render such undisclosed income liable to tax in the previous year in which it is detected by the Income tax Department. Other penal consequences will also follow accordingly.