Come clean on undisclosed income, Modi tells partymen
16 Jun 2016 5:40 AM IST
At the recently concluded BJP national executive meeting, Prime Minister Narendra Modi warned all partymen, including senior BJP leaders and functionaries that if either they or their kin and friends held any foreign accounts or assets, or had undisclosed income, they needed to come clean by September 30, 2016.
Modi’s message to partymen was loud and clear, “If you don’t disclose all information by September 30 and then face any problem after that, don’t come to me for any help.” The PM’s stance has sent BJP functionaries into a tizzy. Modi’s message was directed not at the masses, but at party leaders both at the Centre and states.
The Income Declaration Scheme, 2016 incorporated as Chapter IX of the Finance Act 2016 provides an opportunity to all persons who have not declared income correctly in earlier years to come forward and declare such undisclosed income(s).
Under the Scheme, such income as declared by eligible persons, would be taxed at the rate of 30% plus a ‘Krishi Kalyan Cess’ of 25% on the taxes payable and a penalty at the rate of 25% of the taxes payable, thereby totalling 45% of the income declared under the scheme.
The scheme shall remain in force for a period of 4 months from June 1, 2016 to September 30, 2016 for filing of declarations and payments towards taxes, surcharge & penalty must be made latest by November 30, 2016. Declarations can be filed online or with the jurisdictional Principal Commissioners of Income-tax across the country.
The scheme shall apply to undisclosed income whether in the form of investment in assets or otherwise, pertaining to Financial Year 2015-16 or earlier. Where the declaration is in the form of investment in assets, the Fair Market Value of such assets as on June 1, 2016 shall be deemed undisclosed income under the Scheme. However, foreign assets or income that fall within the purview of the Black Money Act 2015 are not eligible for declaration under this scheme.
Assets specified in the declaration shall be exempt from Wealth tax. No scrutiny and inquiry under the Income-tax Act or the Wealth tax Act shall be undertaken in respect of such declarations.
The immunity from prosecution under the Income-tax Act and Wealth Tax Act is also provided along with immunity from the Benami Transactions (Prohibition) Act, 1988 subject to transfer of assets to the actual owner within the period specified in the Rules. Non-payment of total taxes, surcharge & penalty on time, or declaration by misrepresentation or suppression of facts shall render the declaration void.
The circumstances in which the Scheme shall not apply or where a person is held to ineligible are specified in section 196 (Chapter IX) of the Finance Act, 2016.
The non-declaration of undisclosed income under the Scheme would render such income liable to tax in the year prior to its detection by the Income tax Department. Other penal consequences would also follow accordingly.
Several BJP leaders’ names have surfaced in some major probes. Siddharth Nath Singh’s links to dubious defence middleman Sanjay Bhandari is under scrutiny of the IT department. A senior editor, close to a Cabinet minister is also under the scanner. BJP’s Sushil Bajoria’s name surfaced in the Panama Papers, while Lalit Modi’s name got linked to Rajasthan CM Vasundhara Raje Sindhia and External Affairs Minister Sushma Swaraj last year.
Many state-level BJP leaders’ have business interests spread across sectors like real-estate, education and mining. The PM’s assertion at a forum like the party’s national executive that “the government would not rescue anyone” assumes political significance. But to what extent his message resonated among partymen will be known only after September 30, 2016.
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