The Income Declaration Scheme 2016 or four month window for declaration of domestic black money shall come into effect from 1st June 2016.
The window provides an opportunity to all persons who have not declared income correctly in earlier years to come forward and declare their undisclosed incomes.
Under this scheme
- The declared income would be taxed at the rate of 30 per cent plus ‘Krishi Kalyan’ cess of 25 per cent on taxes payable and a penalty at the rate of 25 per cent of the taxes payable. Thus the total tax to be paid will be 45% of the income declared under the scheme.
- The declarations can be filed online or with the Principal Commissioners of Income-tax. The surcharge and penalty must be paid by 30th November, 2016.
- Assets specified in the declaration will be exempted from Wealth tax. These declarations will also enjoy immunity from prosecution under the IT Act and Wealth Tax Act and also the Benami Transactions (Prohibition) Act, 1988.
- Non-payment of total taxes, penalty and surcharge in time or declaration by misrepresentation or suppression of facts shall render the declaration void. Other penal consequences will also follow accordingly.
The scheme is part of Finance Act, 2016 and will remain in force till 30th of September. However, foreign assets or income to which the Black Money Act 2015 applies are not eligible for declaration under this scheme.