In order to make the income declaration scheme more effective and prompt to black money holders to declare their holdings. PM Modi’s government has done some changes in the income declaration scheme. In this amendment, they have allowed the black money holder to pay interest and penalty in installments. Those who are willing to declare their black money will need to pay penalty and interest; however, one can pay penalty and interest in three installments. Finance Ministry has issued a notification in this regards. According to the notification, three installments can be paid up to 30 September 2017.
List of changes in income declaration scheme for black money are listed below:
- The assess has to pay the first installment of 25 percent of the penalty, surcharge, and tax under the income declaration scheme by 30 November 2016.
- Pay the second installment of 25 percent of the penalty, surcharge, and tax under the income declaration scheme by 31 March 2017.
- Pay the third installment of 25 percent of the penalty, surcharge, and tax under the income declaration scheme by 30 September 2017.
Moreover, Finance Ministry has made it clear that people cannot claim any tax relaxation on their declared income, by declaring their black money. under this scheme.
They would continue to pay tax in the same way as they were doing before. This reasoning came in response to a query raised to Finance Ministry as to how this declaration of black money will impact their tax liabilities declared income.
No change in the Tax even after declaring Black money
As per the notification of Finance Ministry, it is very clear that there would not be any change in the tax, surcharge, and penalty even if the person declares his/her black money in income declaration scheme. Presently, if someone declares his/her black money, he/she has to pay penalty. However, they still have to pay tax and the surcharge of 45 percent along with the regular tax on the existing declared income.
There are certain facilities offered by the government under this scheme to people who want to declare their black money. Main features of these facilities are:
- If a person who is holding the black money can declare his/her black money in income declaration scheme. This income declaration scheme started from 1 June 2016 and is available till 30 September 2016. People interested in declaring their black money under this scheme, still have 4 more months to do so.
- There are two modes available under this scheme, namely, offline mode or online mode.
- The person who is declaring the undisclosed amount through offline mode can declare it only to the jurisdictional Pr. Commissioners of Income-tax across the country.
- The identity of people opting for offline mode will be kept confidential and will be available only to one person. Example- Jurisdictional Principal Commissioners of Income-tax and no one else. If a person does the declaration of the undisclosed amount under this scheme. Then, there won’t be any inquiry or scrutiny against the person who chooses to declare under this scheme.