Declare your Black money, the countdown begins now

A four month window for declaring domestic undisclosed income has begun from 1st June 2016 and will remain in force till 30th September 2016. Declarations can be filed online or with jurisdictional principal commissioners of Income tax.

The four-month window for declaring domestic black money has opened on June 1 and those opting to come clean by paying 45% tax and penalty will not be subject to scrutiny and inquiry by the Income tax department.

The Income Declaration Scheme 2016 will remain in force till September 30 for the filing of declarations and payments towards taxes, surcharge and penalty must be made latest by November 30,

“No scrutiny and inquiry under the Income-tax Act or the Wealth tax Act (now abolished) shall be undertaken in respect of such declarations.

“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 the transfer of asset to the actual owner within the period specified in the Rules,”.

The scheme was announced by Finance Minister in the Budget of 2016 with an aim to fish out black money from the domestic economy. Earlier, the government had come out with a similar scheme for Indian holding undisclosed income abroad.

The scheme will apply to undisclosed income whether in the form of investment in assets or otherwise, pertaining to Financial Year 2015-16 or earlier.

“Under the Scheme, 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 totalling to 45% of the income declared under the scheme,”

Declarations can be filed online or with the jurisdictional Principal Commissioners of Income-tax.

where the declaration is in the form of investment in assets, the ‘Fair Market Value’ of such asset as on June 2016 shall be deemed to be the undisclosed income under the Scheme.

However, foreign assets or income to which the Black Money Act 2015 applies are not eligible for a declaration under this scheme.

Assets specified in the declaration will be exempt from Wealth tax.

Non-payment of total taxes, surcharge and penalty in time or declaration by misrepresentation or suppression of facts shall render the declaration void.

“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,.