Black Money Compliance Window


An amnesty-like one-time disclosure window, under the Income Declaration Scheme 2016, to declare black money opened on June 1, 2016. Under the four-month window, the government will give an opportunity to domestic black money holders to come clean by declaring their ill-gotten wealth by paying a tax and penalty of 45%.
The compliance window for black money was announced in the Union Budget this year as one of the pivotal steps to fish out black money from the domestic economy. Last year the government had launched a similar scheme giving opportunity to people having unaccounted assets abroad to come clean by paying taxes and penalty.
Highlights of the Compliance Window

- Under the Income Declaration Scheme 2016, the government has come up with a four-month disclosure window for persons to come forward and declare their undisclosed income and pay tax, surcharge and penalty totalling 45% of such undisclosed income declared.

- Under the scheme, the income declared will 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, amounting to 45% of the income declared under the scheme.

-- Hoarders of black money will be able to make such declarations till September 30 and the taxes, surcharge and penalty should be paid by November 30.

- The declarations can either be made online on the official e-filing website of the Income Tax department or before the various regional Principal Commissioners of I-T.

- According to a circular issued by the Ministry of Finance, the declarant will be liable for capital gains tax on the sale of such assets in future.

-Declarations made under the scheme will not be used against the persons under the Income-Tax Act or Wealth Tax (now abolished). There will also be an immunity from Benami Transactions (Prohibition) Act.

- As per the scheme, a person cannot declare undisclosed income which has been acquired from money earned through corruption. The scheme will not apply in relation to the prosecution of any offence punishable under the Prevention of Corruption Act, 1988, the Ministry of Finance has said.

- If the declarant fails to pay the entire amount of tax, surcharge and penalty within the specified date (November 2016) the declaration will be considered as void. If that happens, the provisions of the Income-Tax Act will apply in respect of such income as they apply in relation to any other undisclosed income.

Wednesday, 01st Jun 2016, 09:34:19 AM

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