I-T dept changes property valuation rule

Declarant can apply cost inflation index; dept says will accept registered valuer's figure

Those who opt for the ongoing scheme to declare hitherto undisclosed wealth will be allowed to value their property by allowing a cost inflation index  to its registered value.

The four-month Income Declaration Scheme (IDS), to declare what was hidden till now and avoid prosecution by paying extra tax and a penalty, ends on September 30. The change in property rule has been done after representations to this effect, the government said.

Where acquisition of immovable property is backed by a registered deed, it is stated, the declarant may declare the fair market value by applying an (authorised) cost inflation index to the stamp duty value, the department said in a revision to its 'Frequently Asked Questions' on the Income Declaration Scheme.

Also, the report from a registered valuer will not be questioned by the department for disclosures under the scheme. "However, the valuer is expected to furnish a true and correct valuation report, in accordance with the accepted principles of valuation. In a misrepresentation, appropriate action shall be taken against the valuer," said the department.

It has so far issued four sets of such clarifications on various issues.

The new clarifications also say the income declared under the scheme for an earlier assessment year can be taken into account to explain the related transactions of the subsequent assessment years in proceedings pending before an assessing officer, if there is a nexus between the two.

And, that no adverse action would  be taken against the declarant by the Financial Intelligence Unit or the I-T department solely on the basis of cash deposits made in banks consequent to the declaration made under the scheme.

It also said where loans, credits, advances received, share capital, payables, etc, are disclosed in the audited balance sheet but are fictitious in nature and cannot be directly linked to acquisition of a particular asset, then such fictitious liabilities can be disclosed under the scheme without linking the same with the investment in any specific asset.

In case a person has already filed a declaration under the IDS, the FAQ said a revised filing could be made.

The government, sometime back, had extended the deadline for payment of tax and penalty under IDS and allowed declarants to pay the amount in three instalments by September 30 next year.

The first instalment of 25 per cent will have to be paid by November 2016, to be followed by another one of 25 per cent by March 31, 2017. The remaining amount will have to be paid to the exchequer by September 30, 2017.

Earlier the tax, surcharge and penalty under the disclosure window were required to be paid by November 30 this year.

Declarations may either be made online on the official e-filing website of the department or before various regional principal commissioners of IT in the country.