Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: list of goods taxed at 4% :: Central Excise rule to resale the machines to a new company :: articles on VAT and GST in India :: ACCOUNTING STANDARD :: form 3cd :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TDS :: ARTICLES ON INPUT TAX CREDIT IN VAT :: cpt :: empanelment :: due date for vat payment :: VAT RATES :: ACCOUNTING STANDARDS :: VAT Audit :: TAX RATES - GOODS TAXABLE @ 4%
General »
 Banks warn share tax hike threatens Paris' post-Brexit appeal
 PMC may decide on property tax rebate for IT firms this week
 I-T Dept is giving out certificates of appreciation. Have you received yours?
 Government works on ironing out benefits refund mechanism for exportersa
  Tax officials are using an IDS provision to question transactions beyond six-year-limit
 Tax-free bonds rally like midcap funds
 Senior citizens do not have to pay advance tax on salary and interest income
 GST: Audit commissioners to get adjudication powers
 Interest on NRE rupee account can be exempt from tax under FEMA
 Impact of GST on Real Estate Sector
 GST regime: Tax payers allowed to take option of third-party interfaces

Tax paid in black money scheme must be white
July, 15th 2016

The income-tax department has said the tax payment for unaccounted assets declared under the black money scheme cannot be made out of any undisclosed income, making it clear that the money used to pay tax must be white.

A tax payer will get immunity under the scheme only in respect of unaccounted assets declared and not on the tax amount, which adds up to 45 per cent, in case it is paid out of unaccounted wealth, the department has clarified through a fourth set of 'Frequently asked questions" on Thursday.

It explained the issue by way of an example. Suppose a person declares Rs 100 lakh as undisclosed income, being the fair market value of undisclosed immovable property as on June 1, 2016 and pays tax, surcharge and penalty of Rs 45 lakh (30 lakh + 7.5 lakh + 7.5 lakh) on the same out of his other undisclosed income. Effectively, this means that on a total undisclosed income of Rs 145 lakh, the person paid only Rs 45 lakh tax, or 31 per cent tax.

"In this case the declarant will not get any immunity under the scheme in respect of undisclosed income of Rs 45 lakh utilised for payment of tax, surcharge and penalty, but not included in the declaration filed under the scheme," the department said. To get immunity under the scheme for the entire undisclosed income of Rs 145 lakh, one would have to pay tax, surcharge and penalty of Rs 65.25 lakh, the statement said.

Revenue secretary Hasmukh Adhia, speaking at a FICCI seminar on the scheme on Thursday said, "45 per cent is 45 per cent. It is not 31 per cent."

The department statement said tax payers can file a revised declaration but the amount cannot be less than what was initially declared. Giving comfort to those coming clean, it said a person making declaration under the scheme would not be selected for scrutiny under the scheme only on the ground that there is increase in capital in the balance sheet as a result of the declaration made under the scheme.

The 1 per cent tax at source and no capital gains would be levied when a person gets a benami property transferred in his name after making a declaration under the scheme. The department also clarified that no public servant can produce a valid declaration before any person or authority.

"We want people to clean up their books," finance minister Arun Jaitley said at the Ficci function on Thursday, but warned those who did not use the earlier scheme for foreign assets. "Those who missed the bus have certainly missed the bus," he said.

Under the Income Disclosure Scheme, 2016 rules, open till September 30, those declaring unaccounted assets have to pay a tax of 45 per cent (30 per cent tax, 7.5 per cent surcharge and 7.5 per cent penalty). The scheme provides that in case of a valid declaration the department will not make enquiry in respect of sources of income.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Our Experience

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions