Introduction
In order to provide an opportunity to all persons, a new scheme, i.e., Income Declaration Scheme, 2016 (“Scheme”) has been introduced by the Finance Ministry which allows all persons who have not paid full taxes in the past to come forward and declare the undisclosed income and pay tax, surcharge and penalty. The amount of such tax, surcharge and penalty works out to 45 percent of such undisclosed income declared.
Chapter IX has been introduced in the Income-tax Act, 961 (“Act”) for the Scheme and is named as ‘The Income Declaration Scheme, 2016’ consisting of sections 181 to section 199. The scheme has been introduced with effect from June 1st2016 and will remain open up to the date to be notified by the Central Government in the Official Gazette which is September 30, 2016 (notified by the Central Government).
The scheme is applicable in respect of undisclosed income for any Financial Year (“FY”) prior to FY 2016-17 (i.e., AY 2017-18). The Income Declaration Rules, 2016 has also been notified by the Central Board of Direct Taxes (“CBDT”) (on May 19, 2016) and has issued various explanatory notes and clarifications in the form of ‘Frequently asked questions’ (“FAQ”) for better compliance with the Scheme.
Read more: Income Declaration Scheme, 2016