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insightsonindia.com/2016/08/25/air-spotlight-summary-income-declaration-scheme/
INSIGHTS
25/08/2016
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Prime minister has warned black money holders that stringent action would be taken including imprisonment if they
did not declare black money before 30th September. People are investing their black money in gold and a message
has to be delivered that they should come clean with the onetime compliance window ending on 30th September.
Highlights of the scheme
This scheme has been announced by Ministry of Finance which is applicable from 1 st June till 30th September
2016. The Income Declaration Scheme is not an amnesty scheme to reward dishonest taxpayers.
The scheme extends an opportunity to come clean by paying more than the normal tax. Under this the undisclosed
income and the high net worth transactions without PAN number are called Black Money.
Now people can pay 45% tax and can regularise this money. This kind of scheme was introduced in 1997 with the
tax rate of 30%. At that time as many as 260 billion rupees assets and 70 billion rupees tax were deposited by
people. The scheme was very successful.
The government does the same thing once in a while so that both the government and the people are benefited.
If the provisions are not obeyed, then strict actions are taken including imprisonment.
Prime minister said the government should not be forced to take action against black money holders. Government
should compliance self discipline which is the best kind of discipline. Notices to around 7 lakh of high net worth
individuals have been given. The government has relaxed the norms and allowed people to pay in three instalments
over a period of 1 year.
The idea is to make the scheme successful. To make the scheme more effective the government should reduce the
tax rate to 35% to attract more people to comply.
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