The Income Declaration Scheme allows assessees, who have not paid taxes on their income in the past to disclose it by September 30 and pay taxes, penalty and surcharge totalling 45 per cent at the fair market value by November 30.
The 14 Frequently Asked Questions (FAQs) and a circular issued by the Finance Ministry said declarations made under the scheme will remain confidential and will not be used against the declarants under the Income Tax Act or Wealth Tax (now abolished). There will also be an immunity from Benami Transactions (Prohibition) Act. The declarant, the FAQ said, will be liable for capital gains tax on sale of such assets in future.
On a question if a person can declare undisclosed income, which has been acquired from money earned through corruption, the FAQ said “No”. The scheme will not apply in relation to prosecution of any offense punishable under the Prevention of Corruption Act, 1988.
“Therefore, declaration of such undisclosed income cannot be made under the scheme,” it said, adding that such declaration would amount to misrepresentation of facts, and hence, void. As per the FAQ, if a declaration is held as void, provisions of the IT Act will apply in respect to such income as they apply in relation to any other undisclosed income. The scheme for domestic black money holders follows a similar one for those having undisclosed foreign assets.
Individuals, HUF, firm and any association can take advantage of the income declaration scheme announced in the Budget to fish out black money from domestic economy.