Income Declaration Scheme 2016

With the Income Tax Department discovering Rs. 43,000 crore of undisclosed income in the last two fiscal years and the problem of black money still prevalent in India, the Ministry of Finance on 11th of May introduced the Income Declaration Scheme 2016 in a bid to tackle the problem.
So, what is the Income Declaration Scheme 2016?
It is a one-time opportunity for people who have not paid full taxes, declared their income or investment in any asset representing unrevealed income in the past to disclose their income to the government between a compliance window of four months, starting from 1st June 2016 and ending on 30th September 2016. The tax, surcharge, and penalty have to be paid by 30th November 2016. This offers them the chance to clear their past offenses. In order to do so, they must pay tax (at 30%), KrishiKalyan Cess (at 7.5%), and penalty (at 7.5%) totaling to 45% of the total undisclosed income declared.
The benefits of the Income Declaration Act
The biggest advantage of this scheme for the declarant is exemption from penalty or inquiry under Income Tax Act and Wealth Tax Act in respect of declaration.
Immunity from prosecution under the Income Tax Act and Benami act 2016 to the regard of the declaration.
Immunity from Benami Transactions (Prohibition) Act, subject to the transfer of assets from the Benamidar to the real owner before 30.09.17. The Capital Gain Tax will not be levied on the Benamidar.
The declaration can be void due to the following reasons:
Misinterpretation or the suppression of the actual undisclosed income.
Nonpayment of the combined taxes by 30th November 2016
What happens in the case of non-compliance?
The effect of non-compliance can be severe. The department will issue any undisclosed income or undeclared assets in any year up to FY 2015-16 brought to notice. Penalty and prosecution of defaulters will take place accordingly.
What do you need to fill the forms?
To fill the form for Income disclosure, an assessee requires a valid PAN card and a registration in the e-filing portal.
BENEFITS OF THE SCHEME
In certain cases, depending on the facts, the tax rate can be 31% only or even less than that.
Complete secrecy of the information furnished by the declarant will be maintained by the Department. The same shall not be admissible as evidence in any other proceedings under the Income-tax Act.
Now, file income tax return with the help of tax experts at LegalRaasta.

This article has been contributed by Simmi Setia, Content Writer at LegalRaasta, an online portal for Section 8 company registration, Nidhi company registration, IEC registration.