Rationalisation of the Income Declaration Scheme, 2016

The existing provisions of section 187 of the Finance Act, 2016 provide, inter alia,  that the tax, surcharge and penalty in respect of the undisclosed income, declared under the Income Declaration Scheme, 2016 (the Scheme) shall be paid on or before a notified due date.

In order to address genuine concern of the declarants, it is proposed to amend the said section so as to provide that where the amount of tax, surcharge and penalty, has not been paid within the due date, the Central Government may notify the class of persons who may make the payment of such amount on or before a notified date, along with the interest on such amount, at the rate of one per cent of every month or part of a month, comprised in the period, commencing on the date immediately following the due date and ending on the date of such payment.

Further, the existing section 191 of the Finance Act, 2016 provides, inter alia, that any amount of tax, surcharge or penalty paid in pursuance of a declaration made under the Scheme shall not be refundable.

In order to address genuine concern of the declarants, it is proposed to amend the said section so as to provide that the Central Government may notify the class of persons to whom the amount of tax, surcharge and penalty, paid in excess of the amount payable under the Scheme shall be refundable.

This amendment will take effect retrospectively from 1st June, 2016.

[Clauses 199 & 200]

 

 

 

Post-deadline payment relief: notified declarants may pay outstanding tax with monthly interest and possible refunds after review. Amendments permit the Central Government to notify classes of declarants who may make outstanding tax, surcharge and penalty payments after the due date by a notified date, with interest at one per cent per month or part-month from the day after the due date until payment. The Government may also notify classes of persons entitled to refunds of amounts paid in excess under the Scheme; the refund provision is made retrospective to 1 June 2016.