Income Declaration Scheme, 2016 – Is it beneficial?, Black money has always been in news, discussing and debating about the black money of Indians which has been kept outside the tax structure and has been hidden from the government. The government has been working to get that money out and get the benefit from that. On 29th February, 2016, Finance Minister has introduced the new Scheme for getting that money back. It is known as Income Declaration Scheme, 2016. The full details of the scheme have been mentioned here. Now check more details about “Income Declaration Scheme, 2016” from below…
Income Declaration Scheme, 2016 – Is it beneficial?
Who are eligible under the scheme ?
- Any person which is defined under section 2(31) of the Income Tax Act, 1962, are eligible under the scheme and can disclose any amount of income under the scheme by way of declaration.
- The person who has forgot to show the income for any of the financial years in his income tax return can make a declaration under this scheme.
- Person who has failed to file his return under section 139, where his income was such that the income tax return needs to be filed.
- The income tax return of any year which has missed the assessment or the income tax has not being assessed by income tax officer, declaration can be made.
The purpose for this declaration is to make the person responsible for any of the facts you have been mentioned, so you have to be very careful while mentioning any of the facts or any disclosure in the declaration.
Who are not eligible under the scheme ?
- The persons who have been already covered under Black Money Act, 2015 should not be considered for this scheme.
- Where already the notices has been issued or searches has been started by the income tax officials and such search is still going on.
- Persons which are notified by Special Court, 1992
- Income tax department has been received the information from the foreign agencies and the assessee has not given the same.
- The persons, who are covered under Narcotic Drugs Act, Money laundering Act, Prevention of Corruption Act, or any other Act, would not be eligible under the scheme.
Taxability under this Scheme:
The tax that needs to be paid on those undisclosed income would be on the fair market value as on the inception of the scheme. The scheme is being started from 01st June, 2016 to 30th September, 2016. The tax charged would be as follows:
|Sr No||Particulars||Amount (Rs)|
|1||Tax Payable @ 30% of the undisclosed income, being disclosed now via declaration||XXXXXX|
|2||Krishi Kalyan Cess @ 25% of the above tax payable||XXXXXX|
|3||Penalty @ 25% of the above tax payable in point 1||XXXXXX|
The effective rate for the above scheme is coming to 45%, the calculation of which is as follows:
|Krishi Kalyan Cess: (25% of 30%)||7.5%|
|Penalty: (25% of 30%)||7.5%|
Where to submit the declaration ?
The declaration which is prepared by the assessee, needs to be signed by the assessee himself in case of individual, by karta in case of HUF, by managing director incase of company, by partner in case of firm, and the same needs to be furnished to the Principal Commissioner of the respective jurisdiction, But the important thing is to note that the person who has declared once can not apply for the second time. Assessee would be given only one opportunity to disclose.
Looking on to the above scheme, it seems very lucrative but the scheme is not actually. It nearly takes away your 50% of the income. So the success of the scheme is dependant on the citizens of the India, which is important to note that how the people of India, takes this scheme as.