October 3rd, 2016
Government Scheme Helps Unearth Black Money
The Union Finance Minister Arun Jaitley announced on Saturday that the Central Board of Direct Taxes (CBDT) has received disclosures of black money worth Rs 65,250 crore under the Income Declaration Scheme (IDS), 2016 in form of both assets and cash. This amount has come from 64,275 declarations. It is the biggest ever black money disclosure in the country.
According to Business Standards, Hyderabad emerged as a top destination with the declaration of Rs 13,000 crore, followed by Mumbai ( Rs 8,500 crore), New Delhi (Rs 6,000 crore) and Kolkata (Rs 4,000 crore). The total number of declarant from Mumbai is 4,000.
Tax and penalties government will receive
The disclosure was made by the public in the four-month window under the IDS scheme for declaring the undisclosed income or black money that closed on Friday midnight. According to the government’s tax kitty, based on 45 percent tax requirement, it will get Rs 29,632 crore in tax and penalty.
While the black money declarations will go up once all the online and manual filings of undisclosed assets filed are compiled, the government will get nearly Rs 14,700 crore or half of the due taxes, this fiscal. Arun Jaitley in a press conference, said,”Some disclosures have not been tabulated… This figure could be revised upward once the final tabulation is done.”
The black money figures come as a major success to the incumbent government, which has been facing questions for a long time on the black money fronts.
One of the major reason for the success of this Income Declaration Scheme is because the CBDT had removed the difficulties that had been expressed by those wanting to avail the scheme. The government had offered relaxed payment terms for them. Those who declared black money under the scheme can pay the 45 percent tax in three easy instalments — 25 percent by 30 November, another 25 percent by 31 March 2017 and the balance amount by 30 September 2017. The 45 percent penalty black money holders need to pay include tax, surcharge, and penalty.
The income tax and penalties collected under the scheme will be used for public welfare, Mr Jaitley said, “If we become a totally tax compliant country we will have more resources for public welfare.” Last year, under a similar scheme for foreign black money holders, 644 declarations of undisclosed foreign income and assets were received, and just Rs 2,428 crore was collected in taxes.
However, Mr Jaitley didn’t draw any comparison between IDS and Voluntary Income Disclosure Scheme (VIDS) of 1997. A total tax of Rs 9,760 crore was collected under VIDS amnesty scheme brought by the then Finance Minister P Chidambaram in 1997.
Tax for public welfare
Mr Jaitley said that the money will go to the consolidated fund of India and will be used for public welfare. BJP supremo Amit Shah said that the recovery of this black money will mark the beginning of Bharat Uday (India rising) as the money would be spent on the development of rural sectors and farmers.
The IDS is open for both residents and non-residents of the country who hold black money. Black money has always been a major impediment to the growth of country’s economy. After the NDA government came to power, major steps have been taken to unearth black money of the country. Now, the government has to crack the whip on the parties that are guilty, because this kind of exercises cannot be conducted every single time.