Income Declaration Scheme

According to an amendment in the Finance Bill, 2016, the taxman in the country can reveal information related to taxpayers disclosing previously concealed income under the Budget’s Income Declaration Scheme, if it is deemed to be in public interest.

• The amendment is aimed to allay any misconceptions that the government would keep such taxpayers’ details confidential under any circumstance.

Details:

The Income Declaration Scheme offers people with undisclosed income to declare it by paying a penal tax rate of 45% on such income. The Finance Bill has imported Section 138 of the Income Tax Act into the declaration scheme’s ambit. Bringing in Section 138 to the Scheme brings in objectivity on confidentiality of income tax information and the limitations thereof.

• The aim behind bringing in this section is to dispel the perception that the details disclosed under the scheme are confidential under any circumstances — they can be disclosed if it is deemed to be in public interest.
• However, the discretion has been given to the Chief Commissioner who is a very senior authority and he has to see if it is in public interest to share the information.