Blackmoney disclosure in AY17-18 to face prosecution

The Income Tax Department today warned black money holders of prosecution if they tried to pass off such wealth as current income instead of disclosing it in the one-time compliance window.
In its third set of FAQs, the I-T department assured full confidentiality of information even from other law enforcement agencies and no enquiry of source of income.
It said the Income Disclosure Scheme (IDS)-2016 provides immunity under the I-T Act, 1961, Wealth-tax Act, 1957 and the Benami Transactions (Prohibition) Act, 1988.
"Immunity from Benami Transactions (Prohibition) Act is subject to the condition that the property will be transferred to the declarant (being the person who provided the consideration for the property) latest by September 30, 2017," the I-T department said.

The third set of Frequently Asked Questions (FAQs) released by the I-T department covers 11 queries raised by stakeholders regarding the IDS.
"The information contained in the declaration shall not be shared with any other law enforcement agency. The information will also not be shared within the Income Tax Department for any investigation in respect of a valid declaration," the FAQ said.

To a query on whether undisclosed income can be passed on as current income in the return of income to be filed for Assessment Year 2017-18, the I-T department said "declaration of past undisclosed income in the current year amounts to false verification of return of income which shall attract prosecution under the I-T Act".

It said that if a taxpayer attempts to declare past undisclosed income in the current year, he will have to explain the source of income and substantiate the manner of earning the said income.
In case of disclosure under the IDS, there is no need to explain the source of income, the Central Board of Direct Taxes (CBDT) added.
The IDS-2016 provides a four month window for domestic black money holders to disclose their assets and come clean by paying 45 per cent tax and penalty.
The I-T Department is in receipt of large volume of
information from various sources such as registrars of property, banks, financial institutions, stock exchanges, tax deductors etc, according to the FAQs.

The department has launched a comprehensive data-mining and compliance management programme which will generate a large volume of information about financial transactions undertaken by taxpayers and the relevant year in which the transaction was undertaken.
The FAQs further said that if a house property acquired through ill-gotten wealth has been let-out, the actual rent received or receivable will be required to be declared under the IDS in addition to the fair market value of the house property as on June 1, 2016.
It further said credit for tax deducted in respect of income declared under IDS shall be allowed only in those cases where the related income is declared under the scheme and the credit for the tax has not already been claimed in the return of income file for any assessment year.

The third set of FAQs follows the meeting of Finance Minister Arun Jaitley with industry, trade bodies and chartered accountants earlier this week.
In order to make IDS a success, the CBDT has been trying to give the scheme wide publicity. It also launched a youtube advertisement and TV commercial explaining the benefits of the scheme.