TaxTMI 
TaxTMI 
The Voluntary Disclosure of Income and Wealth Ordinance, 1975 -- Explanatory notes on the provisions of.
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.... the economy. 3. Duration of the Scheme.--The Scheme will apply to declaration of income and wealth made on or after the 8th October, 1975, up till December 31, 1975. [Sections 3, 14 and 15 (part) of the Ordinance] 4. Coverage.--The Scheme will cover all categories of taxpayers, whether corporate or non-corporate. It will, however, not apply in the case of persons who have been detained, or for whose detention orders have been issued, under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA). Persons in respect of whom orders of detention under the aforesaid Act have been issued will not, however, be denied the benefits of the Scheme in the following types of cases:-- (i) where no declaration under section 9 or 12A of COFEPOSA has been made, the order of detention has been revoked on the report of the Advisory Board under section 8 of that Act or before the receipt of such report; (ii) where a declaration under section 9 of COFEPOSA has been made, the order of detention has been revoked before the expiry of the time for, or on the basis of, the review under section 9(3) of that Act, or on the report of the Advisory B....
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.... 1922, or the Income-tax Act, 1961, or to disclose fully and truly all material facts necessary for his assessment or otherwise. The provisions of section 3(1) do not, however, apply in relation to-- (i) income for any assessment year which has not been disclosed in a return of income furnished on or after 8th October, 1975; (ii) income for any assessment year for which a notice under section 139 or section 148 of the Income-tax Act, 1961, has been served on the declarant but the return for that year has not been filed by him before the 8th October, 1975; (iii) in a case where any books of account, other documents, money, bullion, jewellery or other valuable articles or things belonging to the declarant have been seized as a result of any search under section 132 of the Income-tax Act, 1961, or under section 37A of the Wealth-tax Act, 1957, the income in respect of the previous year in which such search was made or any earlier previous year. It will be seen that in a case where any books of account, other documents, money, bullion, jewellery or other valuable articles or things have been seized, there is no bar on the declaration of undisclosed income for any previou....
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....the income-tax payable as stated in the preceding paragraph, the declarant will be required to invest 5 per cent. of the disclosed income in notified Government securities, proceeds of which will be utilised by Government for projects of high social priority. [Section 3 (part) of the Ordinance] 10. Particulars to be furnished in declaration.--The declaration under section 3(1) of the Ordinance is required to be made to the Commissioner of Income-tax concerned. It should be made in Form A prescribed under the Voluntary Disclosure of Income and Wealth Rules, 1975, and should be verified in the manner prescribed therein. The verification includes a solemn declaration by the declarant that income of other persons in respect of which he is chargeable to tax, as also income accruing or arising from assets held by him through other persons, has been shown in the declaration in respect of the year or years for which the declaration is made, to the extent such income was not disclosed or assessed earlier. The declarant has to further declare that income of any other person in respect of which he is not chargeable to tax has not been included in the declaration. ....
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....ernment securities will have to be made in all cases within 30 days from the date of making the declaration and no relaxation in this behalf will be permitted. [Section 5(4) of the Ordinance] 14. Interest payable by the declarant.--Where any part of the income-tax in respect of the voluntarily disclosed income is not paid by the declarant up till 31st March, 1976, the declarant will be liable to pay simple interest at 12% per annum on the unpaid amount from the 1st April, 1976, to the date of payment, and the provisions of the Income-tax Act, 1961, and the Income-tax Rules, 1962, relating to interest payable under section 220(2) will be applicable in relation to such interest. Accordingly, the provisions of section 288B (relating to rounding off of interest) and rules 118, 119, and 119A (relating to levy and calculation of interest) of the Income-tax Rules, 1962, will apply in relation to the interest payable under the Ordinance as they apply in relation to the interest payable under section 220(2) of the Income-tax Act, 1961. [Section 6 of the Ordinance] 15. Concessions and immunities.--The declarant will be entitled to the following concessions and immunit....
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....essment year up to and including the assessment year 1975-76 in respect of the assets specified in the declaration made under section 3(1) of the Ordinance as representing his voluntarily disclosed income. Where the value of the assets acquired out of the voluntarily disclosed income has been understated by the declarant in any wealth-tax return, the amount of under-statement, to the extent the voluntarily disclosed income has been utilised for acquiring such asset, will not be included in the net wealth of the declarant for the said assessment year or years. Where the value of the assets has already been correctly shown in a return of net wealth for any assessment year, such value will, however, not be excluded from such assessment. The above concession will be available only if the requirements as to payment of tax, investment in notified Government securities and making of entries in the books of account referred to in (ii) above are complied with. (v) All particulars contained in a declaration under section 3(1) of the Ordinance shall be treated as confidential and no court or any other authority will be entitled to require any public servant or the declarant to pro....
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....y disclosed income to invest the amount required to be invested in Government securities within the time allowed, he will be deemed to be in default. It will be open to the Income-tax Officer to levy penalty under section 221 for failure to pay income-tax on the voluntarily disclosed income or interest under section 6 and to proceed to recover the arrears of income-tax, interest or penalty under the Ordinance in accordance with the provisions of the Income-tax Act, 1961, relating to the recovery of arrears of tax and other sums due under that Act. Any arrear of the amount required to be invested by the declarant in notified Government securities will also be recoverable under the Income-tax Act, 1961, as if it were an arrear of tax under that Act. No penalty under section 221 of the Income-tax Act, 1961, will, however, be exigible for default in making investment in notified Government securities. [Section 7 of the Ordinance] Provisions relating to disclosure of income in cases of search and seizure. 20. Income which can be declared.--Where any books of account, other documents, money, bullion, jewellery or other valuable articles or things belonging to a....
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.... the declarant under the provisions of the Indian Income-tax Act, 1922, the Income-tax Act, 1961, the Excess Profits Tax Act, 1940, the Business Profits Tax Act, 1947, the Super Profits Tax Act, 1963, the Companies (Profits) Surtax Act, 1964, or the Wealth-tax Act, 1957, other than a penalty imposable under section 221 of the Income-tax Act, 1961, for default in payment of tax or under the corresponding provisions of any of the other Acts mentioned above; (iv) prosecution of the declarant under the provisions of any of the Acts mentioned in (iii) above. The immunity provided under the Ordinance in respect of the above matters will not be available to the declarant unless the tax chargeable in respect of the income declared has been paid by the declarant in accordance with the provisions of section 5 of the Ordinance. [Section 14(1), (5)(part) and (7) of the Ordinance] 22. Particulars to be furnished in the declaration.--The declaration under section 14(1) of the Ordinance is required to be made to the Commissioner of Income-tax concerned. It should be made in duplicate in Form B prescribed under the Voluntary Disclosure of Income and Wealth Rules, 1975, and ....
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....x payable on the aggregate amount of the total income as assessed and the income declared as if such aggregate were the total income, as reduced by the tax payable on the basis of the total income as assessed. 25. The declarant will be given credit in respect of the tax paid by him in the assessment made under the Indian Income-tax Act, 1922, or the Income-tax Act, 1961, in respect of his total income of the relevant previous year or years. [Section 14(5) and (6) of the Ordinance] Provisions relating to voluntary disclosure of wealth. 26. Wealth, etc., which can be declared.--Under section 15(1) of the Ordinance, a person can make a declaration in respect of--(a) the net wealth chargeable to wealth-tax for any assessment year for which he has failed to furnish a return under section 14 of the Wealth-tax Act, 1957, provided no notice under that section or under section 17 has been served on him before the 8th October, 1975, for furnishing the return of net wealth for that year: or (b) the value of the assets which has not been disclosed, or the value of the assets which has been understated, in any return of net wealth for any assessment year. The provisions of (b)....
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....nt, the wealth-tax payable on the aggregate of the net wealth as assessed and the value declared for that year as if such aggregate were the net wealth, as reduced by the wealth-tax payable on the net wealth as assessed. [Section 15(5) of the Ordinance] 29.Investment in notified Government Securities.--In addition to the wealth-tax payable as stated in the preceding paragraph, the declarant will be required to invest in notified Government securities a sum calculated as under:- (a) where the declaration has been made in respect of one assessment year, a sum equal to two and a half per cent. of the amount of net wealth declared under section 15(1)(a) of the Ordinance or, as the case may be, the value declared under section 15(1)(b); (b) where the declaration has been made in respect of more than one assessment year, a sum equal to two and a half per cent. of the net wealth declared under section 15(1)(a) of the Ordinance, or, as the case may be, the value declared under section 15(1)(b) of the Ordinance in respect of the last of such assessment years. [Section 15(6) of the Ordinance] 30. Particulars to be furnished in declaration.--The declaration under section 15(....
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....ection 15(1)(a) or, as the case may be, the value declared under section 15(1)(b) will have to be paid in accordance with the provisions of section 5 of the Ordinance which have been explained in paragraph 12 of this Circular. The investment in notified Government securities will have to be made within thirty days from the date of making the declaration and no relaxation in this behalf will be permitted. 34. As explained in paragraph 15(iv) of this Circular no wealth-tax is payable by a declarant for any assessment year up to and including the assessment year 1975-76 in respect of any assets specified in the declaration made under section 3(1) of the Ordinance as representing his voluntarily disclosed income. Assets which are so exempt from wealth-tax are, therefore, not required to be shown in the declaration under section 15(1) of the Ordinance. 35.Representative assessees.--The provisions of Chapter XV of the Income-tax Act, 1961, and Chapter V of the Wealth-tax Act, 1957, relating to liability in the case of representative assessees will apply in relation to the proceedings under this Ordinance as they apply in relation to the proceedings under the respective ....