No passing off black money as current income, warns Income Tax department
July, 01st 2016
Immunity from Benami Transactions (Prohibition) Act is subject to the condition that the property will be transferred to the declarant (being the person who provided the consideration for the property) latest by September 30, 2017," the I-T department said.
The Income Tax Department has warned black money holders of prosecution if they tried to pass off such wealth as current income instead of disclosing it in the one-time compliance window.
In its third set of FAQs, the I-T department assured full confidentiality of information even from other law enforcement agencies and no enquiry of source of income.
It said the Income Disclosure Scheme (IDS)-2016 provides immunity under the I-T Act, 1961, Wealth-tax Act, 1957 and the Benami Transactions (Prohibition) Act, 1988.
"Immunity from Benami Transactions (Prohibition) Act is subject to the condition that the property will be transferred to the declarant (being the person who provided the consideration for the property) latest by September 30, 2017," the I-T department said.
The third set of Frequently Asked Questions (FAQs) released by the I-T department covers 11 queries raised by stakeholders regarding the IDS.
"The information contained in the declaration shall not be shared with any other law enforcement agency. The information will also not be shared within the Income Tax Department for any investigation in respect of a valid declaration," the FAQ said.
To a query on whether undisclosed income can be passed on as current income in the return of income to be filed for Assessment Year 2017-18, the I-T department said "declaration of past undisclosed income in the current year amounts to false verification of return of income which shall attract prosecution under the I-T Act".
It said that if a taxpayer attempts to declare past undisclosed income in the current year, he will have to explain the source of income and substantiate the manner of earning the said income.
In case of disclosure under the IDS, there is no need to explain the source of income, the Central Board of Direct Taxes (CBDT) added.
The IDS-2016 provides a four month window for domestic black money holders to disclose their assets and come clean by paying 45 per cent tax and penalty.
The compliance window closes on September 30 and tax is to be paid by November 30, 2016.