The 4-month domestic black money compliance disclosure window begins from today. The window will give an opportunity to black money holders to come clean by paying tax and penalty of 45 per cent on the declared assets.
All kind of assets like jewellery, costly paintings and vehicles can be declared under the scheme.
The Central Board of Direct Taxes (CBDT) has said that declarations under the scheme have been “firewalled” against regular assessments and will enjoy immunity from prosecution under various laws like the wealth tax and income tax acts.
Black money holders, who do not avail this opportunity that, stand to face the “stringent” provisions of anti-tax evasion laws, said the Central Board of Direct Taxes.
Under the Income Declaration Scheme, persons making disclosure of unaccounted assets will be given time up to November 30 to pay taxes, penalty and surcharge totalling 45 per cent at the fair market value.
“The department believes in compliance. The scheme is useful for people who are sitting on the fence and they can use the IDS to come clean…No questions will be asked from them. Once this window closes and we get to know that a person has black money, we will tax it and the IT department will take action,” CBDT member SK Sahai said on a show held by DD News.
“We have firewalled the IDS from returns assessment or levy of Wealth Tax or huge penalty. The department also has assured confidentiality against disclosure of the information related to the declarant, at a later stage,” said Rani S Nair.
The black money disclosure scheme also provides immunity from Benami Transactions Act.
Earlier, Finance Minister Arun Jaitley had warned that people with undisclosed assets should use this Declaration scheme, if they want to ‘sleep well’.
On the same lines, both Nair and Sahai of CBDT said that the new tax regime was “moving towards zero tolerance to tax evasion” and those who do not comply, run a risk for themselves.
The taxman will “catch” them sometime in a world that is increasingly getting transparent on these issues, they explained.
However, they also clarified that that a total “immunity and confidentiality” is ensured to the declarants under the IDS, but cases where income is earned from criminal activities like smuggling, drug running and forex violations and those that attract the provisions of the Prevention of Corruption Act will not be eligible to be considered in the scheme.
The CBDT members also added that in cases where a court seeks information of these declarations, where litigation is ongoing, the information could be disclosed by the taxman to the court only.
Declarations under the IDS can be made either online on the e-filing portal of the department or to the range Principal Commissioner of IT where they are assessed.
(With inputs from PTI)