Silver Utensils Dominate Disclosures

Most declarations made in the Voluntary Disclosure of Income Scheme (VDIS) are in the form of silver utensils, disclosures for which do not require a valuation certificate.

According to the scheme, declarations for articles that come under the category of jewellery as described in the Wealth Tax Act must be accompanied with a valuation certificate and a bill showing date of purchase to ascertain the true value of the jewellery or precious stones to be declared.

However, this rule does not hold for silver utensils, as they do not come under the category of jewellery.

The only evidence that is needed in the case of silver utensils is an affidavit indicating the date of purchase, which in any case can be manipulated to suit the declarant, so that he has to pay 30 per cent income tax on a lesser value, if the purchase has been done at a time when the value of silver was lower than the cut-off date of April 1, 1987.

The scheme, launched in June, has been given a three-month extension till March 31, 1998.

The advertising agencies which have been assigned the task of carrying out the promotional work for the scheme Ogilvy & Mather and Hindustan Thomson are believed to be conducting a market survey on the response to this scheme.

They will submit the report to the Central Board For Direct Taxes soon, say sources.

The finance ministry has launched many changes in the revenue department, one of which is Voluntary Disclosure of Income Scheme 1997.

The draft of the new Income Tax Bill proposes a 6 per cent tax deduction at source to eliminate complexities of cost calculation while determining capital gains tax.

Moreover the focus of the income tax department has shifted from individuals to big corporate houses which are seen as larger evading entities.

Henceforth enquiries of the department will be geared towards the source of paid-up capital, directors, promoters, bank accounts, nature of business and loans taken by the bulk of companies that are registered with the registrar of companies but do not figure in the departments roll of assessees.

This is seen as a major step towards widening of the tax base which is one of the departments focus points this fiscal besides Voluntary Disclosure of Income Scheme.

The focus of the income tax department has shifted from individuals to big corporate houses which are seen as larger evading entities