Compliance window for domestic black money opens tomorrow : The Tribune India

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Compliance window for domestic black money opens tomorrow

NEW DELHI: The 4-month disclosure window given to people to pay their taxes as part of the government’s driver against illegally hoarded money and a penalty of 45 per cent on the assets will open on Wednesday.



New Delhi, May 31

The 4-month disclosure window given to people to pay their taxes as part of the government’s driver against illegally hoarded money and a penalty of 45 per cent on the assets will open on Wednesday.

People who have made money through corrupt means will not be allowed to take advantage of the disclosure window.

Under the Income Declaration Scheme, persons making disclosure of unaccounted assets will be given time up to November 30 to pay taxes, penalty and surcharge totalling 45 per cent at the fair market value.

The Finance Ministry officials have also held an online 'talkathon' to create awareness about the disclosure window.

Earlier in the month, CBDT came out with a 14-Frequently Asked Questions (FAQs) and a circular to explain the provisions of the income disclosure window.

It was clarified that the declaration made under the scheme will not be used against the declarants under the Income-Tax Act or Wealth Tax (now abolished). There will also be immunity from Benami Transactions (Prohibition) Act.

Finance Minister Arun Jaitley had said on Monday that people with undisclosed assets should use the limited period income declaration window.

"Starting from day after tomorrow, the new window opens and I will advise all those who have any undisclosed asset to declare it and pay the tax and sleep well. Otherwise, the way the disclosures are becoming more and more public, they will run into serious trouble," Jaitley had said.

Those declaring their undisclosed assets will be liable for capital gains tax on sale of such assets in future.

The scheme, however, will not apply in relation to prosecution of any offense punishable under the Prevention of Corruption Act, 1988.

"Therefore, declaration of such undisclosed income cannot be made under the scheme," the FAQs said, adding that such declaration will amount to misrepresentation of facts and hence void.

On a question whether a person can declare undisclosed income that has been acquired from money earned through corruption, the CBDT in its FAQ said "No".

If a declaration is held as void, the provisions of the Income-tax Act will apply in respect of such income as they apply in relation to any other undisclosed income.

The scheme for domestic black money holders follows a similar one for those having undisclosed foreign assets.

Individuals, HUF, company, firm and any association can take advantage of the income declaration scheme announced in the Union Budget to fish out black money from the domestic economy.

According to the CBDT circular, if a person making the declaration fails to pay the entire amount of tax, surcharge and penalty within the specified date (November, 2016) the declaration will become void.

"Where the declaration is held to be void for any of the above reasons, it shall be deemed never to have been made and all the provisions of the Income-tax Act, including penalties and prosecutions, shall apply accordingly," it said.

It was further observed that the scheme will not be available for undisclosed income which has been assessed to tax and the case is pending before an Appellate Authority.

The amount of undisclosed income declared would not be included in the total income of the person making the declaration. — PTI

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