Skip to main content

Avail of tax amnesty scheme despite high levy

By
The finance ministry will launch an ‘ income declaration scheme’ from June 1. Those who have not declared their income correctly in earlier years will have an opportunity to do so during the four months the scheme remains open.
The government had announced a 90- day amnesty- like window for foreign black money holders in the 2015 Budget. It has now come up with a similar scheme to curb domestic black money. But, the taxation will be at 30 per cent plus a Krishi Kalyan Cess of 25 per cent and a penalty of 25 per cent ( both on the tax payable). Altogether, a person will have to pay 45 per cent of the income declared.
This scheme will apply both to undisclosed income and to investments in assets. In case of assets, the fair market value on June 1 will be deemed the undisclosed income.
“Valuation should be done with utmost care, as any difference can result in hardship to the tax payer,” says Rakesh Nangia, managing partner, Nangia & Co, a chartered accountancy firm. Adds Sanjay Kumar, senior advisor, Deloitte in India: “ To get the correct valuation of assets, go to a government- appointed valuer. In case of land, use the circle rate to get a basic estimate.” No scrutiny or enquiry will be done under the Income Tax Act or Wealth Tax Act for declarations made under the scheme. People will also be granted immunity from the Benami Assets Transactions ( Prohibition) Act, 1988, provided the asset is transferred to the actual owner within a specified time period. Income declared under this scheme will also be exempt from wealth tax.
Certain categories will be excluded from the ambit.
One, persons to whom tax assessment notices have already been issued. Two, people at whose premises a search or survey has been conducted and the time for issuance of notice has not expired. Three, persons about whom the tax authorities have received information on undisclosed income under an agreement with a foreign country. Four, persons against whom there are cases under the Black Money Act, 2015, the Indian Penal Code, the Narcotics Drug and Psychotropic Substances Act, 1985, the Unlawful Activities ( Prevention) Act, 1967, and the Prevention of Corruption Act, 1988; five, persons notified under the Special Court Act, 1992; and finally, persons against whom adetention order has been passed under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974.
The scheme comes with a few caveats. “ The undisclosed income will not affect the finality of any completed assessment,” says Amarpal Chadha, tax partner ( people advisory services) at EY. He adds that immunity will be available only to the person making the declaration. Also, no deduction will be allowed on the income declared.
People availing of this scheme must pay the tax, surcharge and penalty by November 30. “ Failure to do so will result in a situation where the declaration filed will be deemed never to have been made,” says Chadha. Also, if the tax authorities find evidence of further misrepresentation or suppression of facts, again, the declaration will be treated as void. Finally, the tax, surcharge or penalty deposited will not be refunded.
Business Standard New Delhi,19th May 2016

Comments

Post a Comment

Popular posts from this blog

Household debt up, but India still lags emerging-market economies: RBI

By
  Although household debt in India is rising, driven by increased borrowing from the financial sector, it remains lower than in other emerging-market economies (EMEs), the Reserve Bank of India (RBI) said in its Financial Stability Report. It added that non-housing retail loans, largely taken for consumption, accounted for 55 per cent of total household debt.As of December 2024, India’s household debt-to-gross domestic product ratio stood at 41.9 per cent. “...Non-housing retail loans, which are mostly used for consumption purposes, formed 54.9 per cent of total household debt as of March 2025 and 25.7 per cent of disposable income as of March 2024. Moreover, the share of these loans has been growing consistently over the years, and their growth has outpaced that of both housing loans and agriculture and business loans,” the RBI said in its report.Housing loans, by contrast, made up 29 per cent of household debt, and their growth has remained steady. However, disaggregated data sho...
Post a Comment
Read more

External spillovers likely to hit India's financial system: RBI report

By
  While India’s growth remains insulated from global headwinds mainly due to buoyant domestic demand, the domestic financial system could, however, be impacted by external spillovers, the Reserve Bank of India (RBI) said in its half yearly Financial Stability Report published on Monday.Furthermore, the rising global trade disputes and intensifying geopolitical hostilities could negatively impact the domestic growth outlook and reduce the demand for bank credit, which has decelerated sharply. “Moreover, it could also lead to increased risk aversion among investors and further corrections in domestic equity markets, which despite the recent correction, remain at the high end of their historical range,” the report said.It noted that there is some build-up of stress, primarily in financial markets, on account of global spillovers, which is reflected in the marginal rise in the financial system stress indicator, an indicator of the stress level in the financial system, compared to its p...
Post a Comment
Read more

Healthy balance sheets augur well for economy: RBI Governor Sanjay Malhotra

By
  Large tariffs by the United States administration and elevated geopolitical risk have increased near-term global financial stability risks, and along with weather events pose downside risks to domestic growth, Reserve Bank of India(RBI) Governor Sanjay Malhotra said in the foreword to the Financial Stability Report released today.Noting that domestic growth momentum is buoyed by strong domestic drivers, sound macroeconomic fundamentals and prudent policies, Malhotra said: “External spillovers and weather-related events could pose downside risks to growth.”On the other hand, he said the outlook for inflation is benign, and there is greater confidence in the durable alignment of inflation with the Reserve Bank’s target.Commenting that the structural shifts reshaping the global economy are making policy intervention challenging, the Governor emphasised the need for central banks and financial sector regulators to remain vigilant, prudent and agile in safeguarding their economies and...
Post a Comment
Read more