The Income
Declaration Scheme, 2016 came into effect from 1st June, 2016. It
provided an opportunity to persons who had not paid full taxes in the past to
come forward and declare their domestic undisclosed income and assets.
Declarations could be made online as well in printed copies of the prescribed form
up to midnight on 30th September, 2016.
In order to facilitate the
taxpayers and to spread awareness about the Scheme, the CBDT issued a number of
FAQs to address various queries received. Major issues clarified included
manner of declaration of fictitious liability, allowance of cost indexation and
holding period benefit for registered immovable property, sanctity of valuation
report etc. Difficulties with respect to payment of taxes in a short span were
removed by permitting payment of tax in 3 instalments, the last being in
September 2017. Absolute confidentiality of the declarations made was promised
under the scheme to reassure the declarants.
An appeal was made by the
Honourable Prime Minister of India to the general public to come clean on taxes
due. The FM personally addressed stakeholders at many stations. More than 5500
public meetings in various cities were conducted by the department. Innovative
publicity methods like Talkathons, Walkathons, Nukkad Nataks, were used to
spread awareness about the Scheme. The Department’s strategic use of taxpayer
information and data mining techniques further spurred the declarations.
These steps resulted in a
tremendous response from the general public, especially in the last two months.
As a consequence, 64275 declarations were filed upto the midnight of 30th
September, 2016 with an aggregate of Rs.65250 Crore worth of hitherto
undeclared incomes in the form of cash and other assets being declared. With
the final stock taking of declarations being filed in physical printed forms
all over the country till late night on the last day, this number is likely to
be further revised upwards.
This Scheme was the latest
initiative of the Government of India towards tackling. The major steps taken
by the Government against Black Money in the last 2-1/2 years include:
SIT: Many
recommendations accepted such as mandatory quoting of PAN for cash transactions
etc.
Legal Framework: Making
tax crimes predicate offence under PMLA; Amendment of FEMA to provide for
confiscation of domestic assets in place of foreign assets; Enactment of Black
Money Law and Amendment to Benami Act.
International Treaties: Signing
of FATCA with US; Amendment of Mauritius Treaty; Initiative for signing of
Automatic Exchange of Information Treaty with all major countries including
Switzerland, Initiatives under BEPS (Based Erosion and Profit Sharing) such as
country by country reporting, PoEM ( Place of Effective Management) etc.
Detection and administration of tax
evasion cases: Assessment of Rs.8000 crore in HSBC cases as well as
filing of 164 prosecution complaints in l75 HSBC cases; detection of Rs.5, 000
crores of undisclosed deposits in foreign accounts made out of ICIJ cases, 55
prosecution cases filed in those cases; Big investigation in Panama cases has
led to 250 references being made to other countries asking for details about
tax evaders, bank accounts etc. The quantum jump in the searches and survey has
resulted in seizure of Rs.1986 crores as well as undisclosed income of Rs.56,
378 crore in the last two and half years. The upgradation of IT capabilities
has led to non-intrusive methods of detection of tax evasion. Rs.16, 000
crores received as tax out of one such system of Non-filers of Monitoring
System (NMS). 3626 cases of prosecution and compounding in the last two and
half years which is more than double as compared to previous two years.
The faith reposed by the
Government in the CBDT and the Income tax Department strengthened the
administration of the Scheme. This was a major step towards reigning in the
parallel economy of the country and merging it with the mainstream. The CBDT
endeavours to continuously use non-intrusive methods towards widening and
deepening of the tax base.
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DSM/KA