Income Declaration Scheme 2016 is a new initiative from the Income Tax Department where it provides an opportunity to tax payers to come forward and declare income correctly of the previous years.
Under the Scheme, it would be taxed at the rate of 30 per cent plus a 'Krishi Kalyan Cess' of 25 per cent on the taxes payable and a penalty at the rate of 25 per cent of the taxes payable, thereby totalling to 45 per cent of the income declared under the scheme.
The scheme will be available for the period of 4 months from 1 st June, 2016 to 30th September, 2016 for filing of declarations and payments towards taxes, surcharge & penalty must be made latest by 30th November, 2016.
Declarations can be filed online or with the jurisdictional Pr. Commissioners of Income-tax across the country.
Here are 8 things to know
1) The scheme will be applicable to undisclosed income it could be in the form of investment in assets or otherwise, pertaining to Financial Year 2015-16 or earlier.
2) 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.
3) However, foreign assets or income to which the Black Money Act 2015 applies are not eligible for declaration under this scheme.
4) Assets specified in the declaration shall be exempt from Wealth tax. No Scrutiny and enquiry under the Income-tax Act or the Wealth tax Act shall be undertaken in respect of such declarations.
5) 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.
6) Non-payment of total taxes, surcharge & penalty in time or declaration by misrepresentation or suppression of facts shall render the declaration void.
7) The circumstances in which the Scheme shall not apply or where a person is held to be ineligible are specified in section 196 (Chapter IX) of the Finance Act, 2016.
8) 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.