Income Declaration Scheme of the Union Finance Ministry will start from 1 June 2016 and will remain in force till 30 September 2016. The scheme is also called four month window for declaring black money.
Under the Scheme declared income would be taxed at the rate of 30 percent plus 'Krishi Kalyan' cess of 25 percent on taxes payable and a penalty at the rate of 25 per cent of the taxes payable.
In other words, a total of 45% of the income declared under the scheme will be taxed.
Other Key Highlights
• Declarations can be filed online or with the Principal Commissioners of Income-tax.
• Surcharge and penalty must be made latest by 30 November 2016.
• Assets specified in the declaration will be exempted from Wealth tax
• The scheme shall apply to undisclosed income whether in the form of investment in assets or otherwise, pertaining to Financial Year 2015-16 or earlier.
• Foreign assets or income to which the Black Money Act 2015 applies are not eligible for declaration under this scheme.
• Non-payment of total taxes, surcharge and penalty in time or declaration by misrepresentation or suppression of facts shall render the declaration void.
• Immunity from prosecution under the Income-tax Act, 1961 and Wealth Tax Act, 1957 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.
The scheme is incorporated as Chapter IX of the Finance Act, 2016. It seeks to provide an opportunity to all persons who have not declared their income correctly in previous years to come forward and declare their undisclosed incomes.
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