- Wealth PMS
The Budget 2016 continues its stance against Black Money, and is replete with new schemes, or updated older schemes to bring into the system, funds that have been siphoned away without being taxed. In this vein, there are some interesting comments in the Budget.
Under this scheme, any funds that are declared from June 01, 2016 will be levied a base tax of 30%, along with additional surcharge of 7.5% (the proceeds of which go towards the Krishi Kalyan scheme), and another 7.5% as penalty. There are certain circumstances under which this ‘Amnesty’ will not be considered:
Under this Section, it also says that the income now declared “white” is exempt from wealth-tax!
Now the tax scheme makes a clear distinction between under-reported income and misreported income.
It is proposed that the rate of penalty shall be fifty per cent of the tax payable on under-reported income. However in a case where under reporting of income results from misreporting of income by the assessee, the person shall be liable for penalty at the rate of two hundred per cent of the tax payable on such misreported income.
Under Section 270AA, a new entrant this year, people can apply for immunity from the imposition of penalty for with-holding assets as income. Again, this is contingent on certain conditions, as well as the whims of the Assessing Officer.
It is also proposed that no scrutiny and enquiry under the Income-tax Act and Wealth-tax Act be undertaken in respect of such declarations and immunity from prosecution under such Acts be provided. Immunity from the Benami Transactions (Prohibition) Act, 1988 is also proposed for such declarations subject to certain conditions.
While the fight still goes on, the fact is that people who possess black money will think twice before turning themselves and their money in. What is to stop an Officer, from hounding a citizen who has declared? What is the guarantee that he won’t be harassed year-on-year under the same Act? The officer will be loathe to believe that every single rupee has been accounted for, which gives him sufficient justification to revisit the case. Or maybe a new Officer comes into the picture and opens up older cases. The intentions are noble, but the practical efficacy of such a stance is still to be ascertained.