New Income Disclosure Scheme by Manoj Agarwal
Proposed Salient Features of New Income Disclosure Scheme for disclosing black money held as cash. This new income disclosure scheme is proposed to be passed in parliament.
1.This income disclosure scheme will be applicable for undisclosed income in the form of Cash or deposits (including FD/RD,etc) held in in bank accounts or in Post Office (Section 199C) or any other notified assets.
2. Pay Income Tax @ 30% of Cash + Surcharge @ 33% of Tax + Penalty @ 10% of Cash i.e. aggregating to 49.90% of undisclosed income (cash) (Section 199D & 199E)
3. The declarant shall ‘deposit’ minimum 25% of Cash in a Deposit Scheme to be notified by the CG in consultation with RBI. (Section 199F)
4. The ‘deposit’ shall be interest free and shall have a lock-in period of 4 years from the date of deposit [Section 199F(2)]
5. Income Tax + Surcharge + Penalty + Deposit i.e. 74.90% has to be paid to the treasury before making the declaration and the proof of payment is to be attached with declaration.(Section 199H)
6. The amount of undisclosed income (cash) shall not be included in the total income of any assessment year of the declarant. (Section 199I)
7. The undisclosed income may have been earned at any time before 01-04-2017. (The provision inadvertently says on or before 01-04-2017, which should be rectified)
8. The declaration made under the scheme shall not be admissible in evidence against the declarant for the purpose of any proceedings under any act except those mentioned in Section 199O (like the Narcotic Drugs and Psychotropic Substances Act, 1985, the Unlawful Activities (Prevention) Act, 1967, the Prevention of Corruption Act, 1988, the Prohibition of Benami Property Transactions Act, 1988 and the Prevention of Money-Laundering Act, 2002, etc.)
9. If a declaration has been made by misrepresentation or suppression of facts or without payment of 74.90% of cash as per scheme, such declaration shall be void and shall be deemed never to have been made under this Scheme. What constitutes misrepresentation or suppression needs clarification from the government.
10. If a person fails to make declaration as per above scheme, but file IT Return for AY 2017-18 (i.e. for Financial Year 2016-17) declaring any unexplained income/investment, cash credit, etc. under section 68, 69, 69A, 69B, 69Cor 69D (say unexplained income) he shall be liable to pay income tax @60% of such unexplained income. Further, if the same is not so self declared in return but determined by AO, then additional Penalty u/s 271AAC @ 10% of tax payable is leviable.
11. If any person admits of any unexplained income during a search conducted under section 132, he shall be liable to pay penalty @30% of unexplained income admitted in addition to tax of 60% u/s 115BBE i.e. total 90% + Ed. Cess + Surcharge (where applicable)
12. If any person refused to admits any unexplained income during a search conducted under section 132, he shall be liable to pay penalty @60% of unexplained income in addition to tax of 60% u/s 115BBE i.e. total 120% + Ed. Cess + Surcharge (where applicable)
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Manoj Agarwal
GST Expert
Rourkela, India
