Defaulters who declare undisclosed income cannot pay taxes from their black money
The I-T Department has warned that such acts to lower their liability won't grant the declarants immunity from scrutiny, as had been promised by Arun Jaitley.
The Centre on Thursday clarified that black money holders who declare their undisclosed income during the June 1-September 30 compliance window cannot pay their taxes and penalties from these sources of income. The Income Tax Department has warned that such acts to lower their liability will not grant them immunity from scrutiny, as had been promised by Finance Minister Arun Jaitley.
The I-T Department has released a set of four clarifications in the forms of frequently asked questions on the Income Declaration Scheme, PTI reported. These included a query on whether payment under the policy could be made from the undisclosed income without including it in declared amount. This would slash the effective tax rate, penalty and surcharge.
Jaitley had assured defaulters of immunity from any scrutiny, inquiry, or prosecution under the Income Tax Act or the Wealth Tax Act if they declare their undisclosed income within the stipulated one-time compliance window. "People who have undisclosed income and have stayed outside the income tax net, this is the last chance to declare them and sleep peacefully. No one will ask for the source of the disclosed income," the finance minister had said.
The Centre is considering extending this four-month compliance window under the Income Declaration Scheme 2016. It was announced along with the 2016-'17 Budget. The scheme allows domestic black money holders to declare their undisclosed income, pay a tax and penalty of 45%, and avoid prosecution.