New Delhi | Disclosures made under the four- month domestic black money compliance window beginning June 1 will not get immunity from criminal offences like corruption, or fraud under IPC, although there will be no scrutiny of the declarations under the I-T Act.
Such declarations will have immunity from prosecution for non-disclosure of wealth under Wealth Tax and certain provisions of Benami Transaction (Prohibition) Act. However, the Indian Penal Code (IPC) offences will apply if the undeclared wealth was acquired through criminal means, sources told.
The formula for computing the ‘fair market value’ of the assets being disclosed would be provided by the Income Tax department through an explanatory circular. The sources further said disclosures made during the compliance window will be entitled to the indexation benefits on resale of assets.
Indexation, while calculating the incidence of capital gains, is used to assess the value of the asset at the time of sale after discounting inflationary impact. The government had last year come out with a three-month compliance window for foreign black money holders. Disclosures under that window enjoyed immunity from I-T Act, Customs Act, Wealth Tax Act, Companies Act, FEMA and Prevention of Money Laundering Act (PMLA).
Finance Minister Arun Jaitley had in Budget announced a four-month compliance window for domestic taxpayers to declare undisclosed income or asset and clear up their past tax transgressions by paying tax, penalty and surcharge totaling 45 per cent of the undisclosed income.
We plan to open the window under this Income Disclosure Scheme from June 1 to September 30, 2016 with an option to pay amount due within two months of declaration, Jaitley had said. Sources said the notification of the compliance window and the explanatory circular will be issued after the passage of the Finance Bill by Parliament around mid of May.
The revenue department will later take a call on whether it will issue Frequently Asked Questions (FAQs) or it will just issue a explanatory circular along with the notification. Immunity from Benami Transaction (Prohibition) Act, 1988 would be subject to certain conditions, the details of which will be part of the explanatory circular.