Government cannot waive the multi- billion dollar tax liabilities that Vodafone and Cairn Energy face, although it has done the most it could in offering to remove interest and penalty if the principal is paid, Revenue Secretary Hasmukh Adhia has said.
This implies that if tax authorities have already issued a notice in connection with assessment or reassessment or if any proceeding is pending, the window can't be used. The scheme will also not be available if authorities have prior information about the claimant from another country under tax information-exchange treaties. Those having any case against them in connection with the Harshad Mehta securities scam or under the Narcotic
Drugs & Psychotropic Substances Act will also not be eligible. Taking forward the government's resolve to crack down on black money, Finance Minister Arun Jaitley unveiled the Income Declaration Scheme 2016 in the Budget on February 29. The proposal provides a limited-period compliance window from June 1to September 30. Undisclosed income declared under the scheme shall be taxed at an effective rate of 45% and no expenditure or allowance shall be permitted against such undisclosed income or asset.
EXEMPTION FROM SCRUTINY
Taxpayers making such declarations would be exempt from scrutiny, including reassessments and enquiry and prosecution from the relevant provisions of the Income-Tax Act, Wealth Tax Act and Benami Transactions (Prohibition) Act.
Tax authorities have launched a concerted campaign against evasion that has led to Rs 20,000 crore of undisclosed income being unearthed in the past few years. The government had received several representations after a similar window for foreign assets was opened last year that those having undisclosed domestic assets should also be given one last chance.
"For the undisclosed foreign income or assets there is no period of limitation provided under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. But Income-Tax Act, 1961, contains the provisions of period of limitation, pegged at six years, beyond which tax authorities cannot raise any question," said Kuldip Kumar, partner at PwC India.
For example, someone who acquired a house in Delhi in 2005 from unexplained sources, sold it in 2007 and spent the money, doesn't need to come forward to make use of the scheme, Kumar pointed out.
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