Is the current Voluntary Disclosure scheme good for black money hoarders?
Under the current VDIS scheme anyone with any undisclosed money can pay 45% tax with an assurance of no legal obligations or prosecution. Many tax experts feel that the additional of cess and penalty will not make the current scheme as attractive as the one offered in 1997 which brought a record tax amount in the coffers of the income tax department.
In an effort to encourage tax evaders to file their income tax returns, Finance Minister Arun Jaitley introduced the Income Tax Declaration Scheme in 2016 as part of the Finance Bill, 2016. Under this scheme, anyone who has not disclosed their income or assets truthfully in the previous tax assessment year can divulge the details to the government. In turn, they will have to pay a tax of flat 45% instead of the random penalty amounts enforced. This helped weed out tax evaders and black money hoarders who are being unfair to other honest tax payers and the government.
Eligibility Criteria for Income Tax Declaration Scheme:
Section 2(31) of the Income Tax Act specifies which kinds of entities can file tax. These are:
Hindu Undivided Family
Association of persons, whether incorporated or not
Every artificial juridical person not falling in the above categories
This scheme was valid only till 2016.
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