The government on Thursday clarified that black money declarants, using the one-time compliance window, cannot pay tax and penalty from undisclosed income to bring down their liability and such acts will not get any immunity.
The Income Tax Department on Thursday came out with a fourth set of clarifications on the Income Declaration Scheme (IDS) on queries, seeking to know if payment under the scheme could be made out of the undisclosed income – without including the same in the income declared, which would bring down the effective rate of tax, surcharge and penalty payable to around 31 from 45 per cent.
The clarification in the form of frequently asked questions stated there is no intent to “modify or alter the rate of tax, surcharge and fine payable under the Scheme which have been clearly specified in the Scheme itself”. It said “Sections 184 and 185 of the Finance Act, 2016, unambiguously provide for the payment of tax, surcharge and penalty at the rate of 45% of undisclosed income”.
Govt extends payment date under black money scheme
The government on Thursday allowed the payment of tax and penalty in installments over an extended period for the black money disclosed under the one-time compliance scheme, debunking certain assumptions that the effective tax rate could work out to be 31 per cent, much lower than mooted.
The Income Declaration Scheme (IDS), which gives holders of undeclared wealth a chance to come clean by paying tax, surcharge and penalty of 45 per cent and escape punishment, had earlier provided two month’s time after the close of declaration window on September 30 this year for payment of dues. Now, the government has allowed payment of dues in three instalments by September 30, 2017.
The first installment of 25 per cent of the total tax, surcharge and penalty due will have to be paid by November 30, 2016, followed by a second tranche of an equivalent amount by March 31, 2017. The remaining 50 per cent will have to be paid by September 30, 2017, a Finance Ministry statement said.