Income Tax Declaration Scheme {IDS} Information – Main points to Consider

Income Tax Declaration Scheme

IDS New Income Tax Declaration Scheme Launched – Explanation, along with the major points | Find out what are the rules and laws, what will be the penalty, etc.

With the drastic step of Demonetization, the process has slowly started revealing its significance. It has helped to diminish the black money to a great extent. However, the government is also taking other measures to catch the defaulters and drag out existing black money. On 28th November 2016, PM Narendra Modi has launched a new income tax declaration scheme especially to swipe of black money from the country and catch the tax defaulters. In that plan, people who are actually in disguise since longer have been asked to disclose the revenue by 30th November 2016. Many new regulations have been added, and there is a provision for punishment in case of undeclared income. The Below article will explain the new income tax declaration scheme in simple words. Kindly go through it carefully to understand every detail of New Income Tax Declaration Scheme.

Note – Please keep track that IDS stand for Income Declaration Scheme or Income Disclosure scheme.

IDS – INCOME DECLARATION SCHEME ILLUSTRATED

  • The income tax department has made some significant announcements under this project –
  • Old notes of Rs. 500 & 1000 should be submitted to the banks by the end of December 2016. All deposits over Rs. 2.5 Lakh will be calculated.
  • If the existence of untaxed money is acknowledged, then 50 percent of that amount has to be paid in taxes.
  • If you have not disclosed income, do declare it by 30th November
  • A scheme named Pradhan Mantri Garib Kalyan Yojana (PMGKY) has been launched.

NEW INCOME DECLARATION SCHEME (IDS)

Here is the comparison of the provisions, check out which regulations will be modulated and which will remain same as per the income declaration scheme.

PARTICULARS EXISTING PROVISIONS PROPOSED PROVISIONS
General provision for penalty PENALTY (Section 270A)

Under-reporting – @50% of tax

Misreporting – @200% of tax

(Under-reporting/ Misreporting income is normally difference between returned income and assessed income)

No changes proposed
Provisions for taxation & penalty of unexplained credit, investment, cash and other assets TAX  (Section 115BBE)

Flat rate of tax @30% + surcharge + cess

(No expense, deductions, set-off is allowed)

TAX  (Section 115BBE)

Flat rate of tax @60% + surcharge @25% of tax (i.e. 15% of such income). So total incidence of tax is 75% approx.

(No expense, deductions, set-off is allowed)

PENALTY (Section 271AAC)

If Assessing Officer determines income referred to in section 115BBE, penalty @10% of tax payable in addition to tax (including surcharge) of 75%.

Penalty for search  seizure cases Penalty (271AAB)

(i) 10% of income, if admitted, returned and taxes are paid

(ii) 20% of income, if not admitted but returned and taxes are paid

(iii) 60% of income in any other case

Penalty (271AAB)

(i) 30% of income, if admitted, returned and taxes are paid

(ii) 60% of income in any other case

Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016’ (PMGKY) New Taxation and Investment Regime Undisclosed income in the form of cash & bank deposit can be declared:

(A) Tax, Surcharge, Penalty payable Tax                   @30% of income declared

Surcharge          @33% of tax

Penalty              @10% of income declared

Total @50% of income (approx.)

(B)  Deposit 25% of declared income to be deposited in interest free Deposit Scheme for four years.

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