The Income Declaration Scheme (IDS) is a new scheme from the Income Tax Department, where an individual who has not paid full taxes in the past can come forward and declare the undisclosed income and pay tax, surcharge, and penalty totalling in all to forty-five per cent of such undisclosed income declared.
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Note that information provided in the declaration will be confidential as in the case of return of income filed by an assessee.
All ‘persons’, such as individuals, HUFs, companies, firms, the association of persons (AOP) etc., are eligible to make the declaration under the Scheme.
Declaration can be made of any undisclosed income, investment in any asset representing undisclosed income relating to any financial year up to 2015-16.
What is the tax payable by declarant?
Tax is applicable at 30% of undisclosed income, the surcharge is applicable at 7.5% of undisclosed income and penalty will be levied at 7.5% of undisclosed income. Total of 45% undisclosed income declared.
What is the last date to make payment?
A declaration should be made before 30th September 2016 as it is the last date for making a declaration under the Scheme and 30th November 2016 as the last date for which the tax, surcharge, and penalty shall be paid.
When will the declaration be considered as invalid?
In the following situations, a declaration shall be void. If the declarant fails to pay the entire amount of tax, surcharge, and penalty within the specified date, that is September 30, 2016. Where the declaration has been made by misrepresentation or suppression of facts or information.
However, any tax, surcharge or penalty paid in pursuance of the declaration will not be refundable under any circumstances.
Declaration not eligible in certain cases such as where a notice under section 142 or section 143(2) or section 148 or section 153A or section 153C of the Income-tax Act has been issued in respect of such assessment year and the proceeding is pending before the Assessing Officer.
Also, where a search has been conducted under section 132 or requisition has been made under section 132A or a survey has been carried out under section 133A of the Income-tax Act in a previous year.
Cases which are covered under the Black Money (Undisclosed Foreign Income & Assets) and Imposition of Tax Act, 2015 are not eligible for declaration.
The declaration may be filed online on the e-filing website of the Income-tax Department using the digital signature of the declarant or through electronic verification code.
It is highly possible that in the past owing to error or deliberately, you have not declared your income correctly. This is a great opportunity to go ahead and declare your correct income and that which was concealed.