Last year, the Indian Government introduced a scheme for voluntary declaration of undisclosed foreign income and assets for resident taxpayers under the Black Money Act. A similar scheme is proposed by the Finance Bill, 2016 referred as ‘Income Declaration Scheme, 2016’ (‘IDS, 2016’). This article, discusses the possible benefits available to the taxpayers under the IDS, 2016 comparing the provisions of (a) Black Money Act; (b) Existing penal provisions under Section 271(1)(c) of the Income Tax Act, 1961 and (c) Proposed penal provisions under Section 270A.
Comparison 1: Declaration under Black Money Act v. IDS, 2016
The Black Money Act is a declaration scheme under which all resident taxpayers can declare the undisclosed foreign income and assets. On such undisclosed income and assets the taxpayer was required to pay up to 60% as both tax and penalty under that scheme. However, the officer designated had received 638 declarations only amounting to Rs 3,770 crores of undisclosed foreign income and assets by the end of compliance window (i.e., 30th September, 2015). Hence, one can conclude that this declaration Scheme was not successful.
Click here to read full article.