1. Income Declaration Scheme, 2016
- By CA Kirti Kumar Joshi

2. History of measures taken by Government to curb Black Money
Demonetization of High denomination notes in 1946 and 1978.
Voluntary Disclosure Income Scheme in 1951, 1965, 1975.
Last Voluntary Disclosure of Income Scheme in 1997
Amendments made in Prevention of Money Laundering Act, 2002.
Black Money Act
- Undisclosed Foreign Income and Assets Scheme, 2015

3. Income Declaration Scheme,2016 (Chapter IX of the Finance Act, 2016)
Features
A new scheme has been designed to declare any ‘undisclosed income’ vide the Finance Bill, 2016 for persons who have not paid full taxes in the past.
The scheme provides for declaration by any person of his undisclosed income by paying tax, surcharge and penalty on such declared income.
Thus through announcing this scheme, Government has provided one more opportunity to permit the
non-filers,
stop filers and
persons with unaccounted income/investments

4. Scope Applicable to Residents as well as Non-residents To declare
Undisclosed Income
Undisclosed Assets

5. Provisions of the scheme
Scheme started on 1st June 2016
Ends on 30th September 2016
First Installment of tax 25% - 30th November 2016
Second Installment of tax 25% - 31st March 2017
Final Installment 50% - 30th September 2017

6. Rate of Tax
45%

7. Eligible Period Disclosure of Undisclosed Income upto F.Y. 2015- 16
Except years pending u/s 142, 143(2), 148, 153A/C on
If a notice (other than Survey and Search) is issued on or after , the person is still ELIGIBLE to declare

8. Income not Disclosed in Return Income Escaped Assessment
Persons Eligible
No Return Case
Income not Disclosed in Return
Income Escaped Assessment

9. Opportunity Cases detected under NMS (Non Filer Monitoring System)
No return filed
Persons covered under AIR Reporting
Immovable property sale/ purchase
Unaccounted cash transactions
Bogus Long term capital gains
Undisclosed FDR’s – TDS Credit available

10. Disqualified Persons under Scheme
Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015
Special Court (Trial of offences relating to Transaction in Securities) Act,1992
Indian Penal Code
The Narcotic Drugs and Psychotropic Substance Act ,1985
The unlawful Activities (Prevention) Act,1967
The prevention of Corruption Act,1988
The Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974

11. Valuation of Undisclosed Asset (Rule 3)
Higher of
Cost or
Fair Market Value as on
Except Immovable Property in which indexation benefit available

12. What can be Declared
Immovable Property, Bullion, Jewellery , Archeological Collections, work of art etc.
Interest of a person in a Partnership firm/ AOP/ LLP
Shares and Securities :
A. Listed on Recognized Stock Exchange
B. Unquoted Shares and Securities
Any other Asset - Stock in Trade, Interior Decorations, etc.
Bogus/ accomodation entries, undisclosed loans and advances.
All India list of registered valuers of different classes of assets notified.

13. Exemptions/Immunities
Not be included in the Total Income
Not to affect finality of completed assessments ;
Immunity from prosecution ;
Exemption from wealth tax
Immunity from the Benami Law

14. CAUTION
If tax not paid then income will be taxed in respective year as per regular Income Tax provisions
Not entitled to reopen any assessment or claim any setoffs or relief
No deduction against such declared income.
Declaration Void if made by misrepresentation or suppression of facts
No benefit or immunity to Person other than declarant

15. SPECIAL POWERS - 197(c)
Where no declaration is made of any undisclosed income of earlier period then the same will be deemed as income earned in the year in which a notice under section 142, 143(2), 148, 153A or 153C issued by the AO.
It seems the limitation of six year period for reopening assessment under section 148 will not help assessee’s.

16. How to file Declaration
Electronically under digital signature
Electronically through EVC
In Print Form

17. How to make Declaration
Form 1
Declaration of Income and Assets u/s 183
Form 2
Acknowledgement within 15 days
Form 3
Proof of payment filed by declarant to CIT
Form 4
Certificate issued by CIT for Income Declaration

18. What to do with BLACK MONEY….???
Reporting of high value transactions (AIR)
Non filer Monitoring (NMS)
PAN based GST
TCS 1% on cash purchases above Rs.2 Lakhs (S.206)
Reporting of Cash sales over 2 Lakhs in AIR by Audit Assessee
Project INSIGHT - Data Mining, Web Mining, Data Analytics

19. फेसबुक पर रईसी दिखाने पर आयकर का नोटिस
फेसबुक पर रईसी दिखाने पर आयकर का नोटिस
पिछले कुछ सालों में सोशल मीडिया लोगों के लिए अपनी रईसी दिखाने का नया माध्यम बन चुका है।
विदेशों में घूमने-फिरने की फोटो, होटलों में पार्टी करते हुए फोटो, महंगी कारजैसे फोटो अपलोड किए जाते हैं।
विभागीय सूत्रों ने बताया कि पिछले माह 20 लोगों को नोटिस भेज जवाब मांगा गया है। ये भी इसी तरह की लगातार पोस्ट के कारण विभाग की नजरों में आए। इनके रिटर्न देख आगे की कार्रवाई की जाएगी। वहीं इस समय आय के हर स्रोत पर गौर किया जा रहा है। naidunia.jagran.com

20. BENAMI TRANSACTION (PROHIBITION) ACT AMENDED

21. Definition of benami transactions widened,
The Benami Transactions (Prohibition) Amendment Bill, 2015 (Passed by Both houses)
Definition of benami transactions widened,
Establishing Executing authorities
Stringent Penalty and Prosecution

22. Scope Original Definition of BENAMI TRANSACTION
a transaction where a property is held by or transferred to a person, but has been provided for or paid by another person.
Now includes transactions where
the transaction is made in a fictitious name,
the owner is not aware of / denies knowledge of the ownership of the property,
the person providing the consideration for the property is not traceable.

23. Authorities under Benami Law
Initiating Officer
Approving Authority
Adjudicating Authority
Administrator
Appellate Tribunal

24. PENAL PROVISIONS Penalty for entering into benami transactions
Rigorous Imprisonment of 1 to 7 years, AND
fine upto 25% of the FMV of the benami property.
Confiscation of benami property
Penalty for providing false information
Rigorous Imprisonment of 6 month to 5 years
Fine upto 10% of the FMV of the benami property.

25. IDS - What's on the mind of taxpayer
High tax rate of 45% and liquidity issue
May be offered in current years income
Should not bother about income/ assets beyond six years
Government may announce another scheme
Waiting for others to take action first
Status quo after closure of the scheme

26. Confidentiality
Information will not be shared with other agencies & even AO
Secrecy Clause

27. Golden Last Chance 26.06.16 Man ki baat –
We lose our peace by violating rules, why not give correct information about our income and assets to Govt
Reminder –
I urge you to ask everyone associated with your industry to declare assets as such (tax evasion) things are more common in this industry. Why should we fear the government or income tax officers? Its better that one declares their assets before September 30

28. After the Scheme ends……..

29. Thank You