The F. M. has announced a scheme for Voluntary Disclosure (TIDS, 2016) of Undisclosed Income and Assets by Domestic Taxpayers. On the basis of the updates available, we are noting below the Frequently Asked Questions on the aforesaid Scheme:-
FAQ 1: Who is Eligible?
Reply: Any person can file a declaration under this Scheme.
FAQ 2: What can be disclosed?
Reply: Income of any assessment year prior to AY 2017-18:-
a) For which he has failed to furnish the Return of Income u/s 139 of the I. T. Act, 1961
b) Undisclosed Income which he has failed to disclose or has escaped assessment; and
c) Declared in the form of any investment in any Asset (Undisclosed).
FAQ 3: What will be the value of the Undisclosed Asset?
Reply: The value of Undisclosed Asset shall be the Fair Market Value (FMV) as on the date of commencement of this Scheme i.e. 01-06-2016. FMV shall be determined in such manner as may be prescribed.
FAQ 4:Can the declarant claim any deduction in respect of expenses or allowance in respect of Income declared under this scheme?
Reply: No deduction in respect of any expenditure or allowance shall be allowed against the income in respect of which declaration under this section is made.
FAQ 5: What is the Rate of Tax. Surcharge and Penalty on the Income disclosed?
Reply: The declarant will have to pay following tax, surcharge and penalty at the following rate’s on the amount of Income Disclosed:-
- Tax @ 30%
- Surcharge @ 7.50%
- Penalty @ 7.50%
TOTAL – 45%
FAQ 6:Who will sign the Declaration?
Reply: The declaration will be signed by the following person:-
| Category of Declarant | Signing Authority for Declaration |
| Individual | a) If the declarant is present in India – Self;
b) If the declarant is absent from India – Self or Authorised Representative c) If the declarant is mentally incapacitated – By his guardian or any other person competent to act on his behalf. |
| H.U.F. | a) By Karta of HUF;
b) If the Karta is absent from India or Mentally Incapacitated – By any adult member of the HUF |
| Firm | a) By Managing Partner of the Firm
b) If the Managing Partner is absent from India or Mentally Incapacitated – By any other Partner of the Firm |
| Company | a) By the Managing Director of the Company;
b) In case if the MD is unable to sign for any reason then by any other director of the Company. |
| Association | a) By Member of the association; or
b) Prinipal Officer |
| Other Person | a) By that Person; or
b) Other person competent to act on his behalf. |
FAQ 7: Can a person make multiple declarations under this scheme?
Reply: Any person, who has made a declaration under sub-section (1) of section 180 in respect of his income or as a representative assessee in respect of the income of any other person, shall not be entitled to make any other declaration, under that sub-section in respect of his income or the income of such other person, and any such other declaration, if made, shall be void
FAQ 8: What is the Last date of filling declaration under this Scheme and / or Payment of Tax, Surcharge and Penalty?
Reply: The last date shall be notified by the Government in the Official Gazatte.
FAQ 9: What are the Benefits to the Declarant by giving disclosure under this scheme?
Reply: The declarant will be eligible for following benefits in respect of the income Disclosed under the Scheme:-
- Amount of income declared under this scheme will not be included in the Total Income of the declarant for any assessment year under the Income Tax Act;
- Undisclosed income declared not to affect finality of completed assessments;
- Undisclosed income declared not to be treated as benami transaction in certain cases;
- Immunity from prosecution;
- Exemption from wealth-tax in respect of assets specified in declaration;
FAQ 10: What is the Risk in Filling the Declaration?
Reply: where a declaration has been made by misrepresentation or suppression of facts, such declaration shall be void and shall be deemed never to have been made under this Scheme. The tax, surcharge or penalty deposited under this scheme shall not be refunded.
FAQ 11: Who is in-eligible to file a declaration under this Scheme?
Reply: The provisions of this scheme shall not apply in respect of:-
- Any person in respect of whom an order of detention has been made under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (subject to specified conditions);
- in relation to prosecution for any offence punishable under Chapter IX or Chapter XVII of the Indian Penal Code, the Narcotic Drugs and Psychotropic Substances Act, 1985, the Unlawful Activities (Prevention) Act, 1967 and the Prevention of Corruption Act, 1988;
- to any person notified under section 3 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992;
- in relation to any undisclosed foreign income and asset which is chargeable to tax under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015;
- in relation to any undisclosed income chargeable to tax under the Income-tax Act for any previous year relevant to an assessment year prior to the assessment year beginning on the 1st day of April, 2017—
- where a notice under section 142 or sub-section (2) of section 143 or section 148 or section 153A or section 153C of the Income-tax Act has been issued in respect of such assessment year and the proceeding is pending before the Assessing Officer; or
- where a search has been conducted under section 132 or requisition has been made under section 132A or a survey has been carried out under section 133A of the Income-tax Act in a previous year and a notice under sub-section (2) of section 143 for the assessment year relevant to such previous year or a notice under section 153A or under section 153C of the said Act for an assessment year relevant to any previous year prior to such previous year has not been issued and the time for issuance of such notice has not expired; or
- where any information has been received by the competent authority under an agreement entered into by the Central Government under section 90 or section 90A of the Income-tax Act in respect of such undisclosed asset.
For any information or query in respect of the aforesaid matter, you may speak in person with CA Ritul Patwa on 9001231231.