Report on Income Disclosure Scheme, 2016

The Central Board of Direct Taxes (CBDT) has received total disclosures of Rs. 65,250 crore under the Income Disclosure Scheme, 2016 in the form of cash and other assets.

• A four-month window was provided under the scheme for declaring undisclosed income or black money.

Background:

The Income Declaration Scheme offered people with undisclosed income to declare it by paying a penal tax rate of 45% on such income. Assets specified in the declaration were exempted from Wealth tax.

• These declarations also enjoyed immunity from prosecution under the IT Act, Wealth Tax Act and the Benami Transactions (Prohibition) Act, 1988.

Income Declaration Scheme:

The scheme had provided a one-time opportunity to black money holders who had not paid full taxes in the past to come clean by declaring their domestic undisclosed income and assets by paying tax plus penalty at the rate of 45 per cent. 

• The government stands to mop up 45 per cent of this, or about Rs 29,000 crore, in taxes and penalties.(paying tax at 30 per cent, and Krishi Kalyan surcharge at 7.5 per cent and penalty at 7.5 per cent — a total of 45 per cent of the undisclosed income).
• Under the income declaration scheme, people who have received notices under Sections 142 (1), 143 (2), 148, 153A or 153C of the Income Tax Act are not eligible to disclose previously concealed income.
• The income tax and penalties collected under the scheme will be used for public welfare.