The government has come out with the Income Declaration Scheme or IDS under which people would not be prosecuted if they declared their illegal money and paid 45% tax and penalty on it.
A day after Prime Minister Narendra Modi goaded black money holders to use the one-time compliance window to declare their ill-gotten wealth or face consequences, Finance Minister Arun Jaitley, along with other senior ministers and bureaucrats, met industry representatives, tax experts and accountants to drive it into "mission mode".
The government has come out with the Income Declaration Scheme or IDS under which people would not be prosecuted if they declared their illegal money and paid 45% tax and penalty on it.
The scheme, opened on June 1, will close on September 30.
Neeru Ahuja, senior direct taxes council member of ASSOCHAM, who was part of the meeting, said the government was clear that it wanted to make the scheme a success and wanted feedback and suggestions from stakeholders.
"One thing was clear (in the meeting), that they wanted to make it a success," she said.
She said the three main issues that were extensively discussed at the meeting were confidentiality of the information disclosed by wealth declarants, easy payment mode of tax and penalty and extension of the compliance window period by a quarter or two.
"There was a concern that the information declared could go to other agencies. Cash flow issue was also discussed where people who owned immovable assets wanted the option of paying in installments. We also asked for the compliance window to be extended to December or March (2017)," she said.
After the meeting, Jaitley told the media that there would be no extension of window period. "People who have (undisclosed) income and have stayed outside the income tax net, this is the last chance to declare them and sleep peacefully," he told reporters.
He warned that people who did not take advantage of the opportunity offered by the government would be shown "consequences" of doing so.
He assured that the declaration made under the law would be protected. "That information is not to be shared with any other authority. It won't be made public, it won't be shared with anybody."
The minister clarified that IDS was not an immunity scheme as declarants would be penalised.
To bring about more awareness on the scheme, the Central Board of Direct Tax (CBDT) has suggested putting up posters about it at places frequented by potential declarants, like club houses, posh markets, showrooms of high-end products.
The government had undertaken a similar effort last year to unearth unaccounted black money stashed abroad, where those who declared their hidden wealth were let off on payment of 30% tax and 30% penalty.
During the three-month compliance window, a total of Rs 4.147 crore of undisclosed income was declared, from which government got a net tax income of Rs 2,500 crore.
(with inputs from agencies)
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