Thursday, 13 October 2016

The Income Declaration Scheme 2016

Income Declaration Scheme 2016 is an initiative by the Income Tax Department to encourage general public of India to come forward and disclose their undeclared income. In return, they will be benefited in terms of zero assets charges and scrutiny immunity and much more.
Here are the complete details about the Income Declaration Scheme 2016.

Have a look at them.

The target audience
All persons such as individuals, companies, firms, HUFs, AOPs (association of persons) etc., are the ideal audience who can disclose their income under the Income Declaration Scheme 2016.
Scope & Coverage
Persons having undisclosed income under the financial year 2015-2016 should consider the below mentioned categories to see where their income stands.
·        any undisclosed income
·        investment in any asset representing undisclosed income
Amounts to be paid by the declaring person
Undisclosed in any form is subjected to tax, surcharge, and penalty charges. The rates at which the charges will apply on the income are mentioned below:
1.      30% of undisclosed income as Tax filing
30% of the total income is liable to income tax under the Income Declaration Scheme. This means if someone has Rs. 3, 00000 undisclosed income then 30% of this income i.e. Rs. 90, 000/- is to be submitted as tax.
2.      7.5% of undisclosed income as Surcharge filing
Around 7.5% of total undisclosed is intended to be deducted as surcharge rates. Individuals or Companies disclosing their income under this scheme need to pay this amount as surcharge.
3.      7.5% of undisclosed income as penalty filing
As all the persons disclosing their income under the Income Declaration Scheme are estimated to file their income tax after due date, they are subjected to penalty fees also. Around 7.5% of total undisclosed income is required to submit as penalty fees.

Total amount to be paid:
30% as tax + 7.5% as Surcharge + 7.5% as Penalty = 40% of total undisclosed income declared
Benefits of Declaring Income under the Income Declaration Scheme 2016
1. Assets declared under the scheme will have zero Wealth Tax
2. As per the declaration scheme, there will be zero scrutiny or inquiry under Income-tax Act and Wealth Tax Act.
3. Protection from prosecution under Income Tax Act and Wealth Tax Act
4. Protection from Benami Transactions (Prohibition) Act, subject to transfer of assets by the benamidar to the real owner before 30.09.2017
Effect of Non-declaration of Income
Undisclosed income in any form and the value of any asset emerging out of such income till the financial year 2015-16 if remain undisclosed, will be liable to tax in the year of issued notice by the Income Tax Department of India.
All persons falling under the undisclosed income, if do not disclose their income till the defined dates, are intended to face the consequences like interest, penalty, and prosecution under I-T Act.
Important Dates
Scheme starts: June 1, 2016
Scheme Ends: September 30, 2016
Payment of Tax, surcharge and penalty: up to 30th November, 2016
Declaration when void
• Misrepresentation or suppression of facts
• Non-payment of tax, surcharge and penalty by 30.11.2016.
Income Declaration Scheme 2016 - Forms
Form 1 – Declaration form is to be filed till 30th Sep, 2016)
Form 2 – Acknowledgment of declaration will be issued by PCIT/CIT within 15 days from the end of the month in which declaration is filed.
Form 3 – Intimation of payment of tax, surcharge & penalty is to be furnished by the declarant by 30th Nov, 2016.
Form 4 – Certificate of declaration will be granted within 15 days from the date of intimation of payment).
Mode of Declaration
Online: To be filed online via the official portal of Income Tax.

Offline: To the Jurisdictional Pr. Commissioner/ Commissioner of Income Tax.