CBDT releases clarification on Income Declaration Scheme

CBDT releases clarification on Income Declaration Scheme

This Income Declaration Scheme was announced during Budget 2016 and will be in force for four months starting June

 Jinsy Mathew   
  • May 23, 2016  
  • |  
  • UPDATED   15:19 IST

The Central Board of Direct Taxes (CBDT) in a detailed questionnaire has provided clarification pertaining to the Income Declaration Scheme, 2016, incorporated as Chapter IX of the Finance Act 2016. This Scheme provides an opportunity to all persons who have not declared income correctly in earlier years to come forward and declare such undisclosed income(s).

The undisclosed income can in the form of investment in assets or otherwise, pertaining to Financial Year 2015-16 or earlier. However, foreign assets or income to which the Black Money Act 2015 applies are not eligible for declaration under this scheme.

According to the press release, '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 totaling to 45% of the income declared under the scheme.'

Declarations can be filed online or with the jurisdictional Pr. Commissioners of Income-tax across the country. The scheme shall remain in force 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.

Some of the highlights of Income Declaration Schemes are that no scrutiny and enquiry under the Income-tax Act or the Wealth tax Act shall be undertaken in respect of such declarations and there will also be immunity from Benami Transactions (Prohibition) Act.