All You Need To Know About Income Declaration Scheme
The amount of tax paid in India in the relationship with its GDP is one of the worst in India. Undeclared incomes that have crossed over trillions of rupees in the country is one of the major woes of the economy. The Income Declaration Scheme (IDS) was announced during the Union Budget 2016 to put a cap on the undisclosed income.
What is Income Declaration Scheme?
The Centre has opened a window for those who have not declared their income correctly in earlier years, to come clean this year. The declared income will be taxed at the rate of 30 per cent plus a Krishi Kalyan cess of 25 per cent on this tax, and a penalty at the rate of 25 percent of the tax payable; thus bringing the total tax outgo to 45 per cent of the income declared.
The undisclosed sum can be held either in the form of assets or in any other form. If the taxpayer is holding undisclosed income in the form of an asset, the market value of the asset as on June 1 shall be used to compute the sum of undisclosed income. The Centre has also promised that those declaring undisclosed income will not be subject to further enquiry or scrutiny. On the other hand, if someone fails to use this opportunity, the income, if unearthed by the taxmen in subsequent years, will be subject to tax for the previous years and there could be penal actions as well.
This is a firm step by the government as the Centre is likely to collect over Rs 50,000 crore in this drive.
The Centre announced an extension of a deadline under the Income Declaration Scheme. According to the new plan, a minimum of 25 percent of the tax, surcharge and penalty is to be paid by November 30, 2016, another 25 per cent by March 31, 2017, and the remaining amount by September 30, 2017. The previous deadline for the entire payment of the tax, interest, and the penalty was November 30, 2016.
For those who have undisclosed income may have to face penal provisions or pay a large sum of money as fine. Tax base will be widened for those who diligently pay their tax,