TMI BlogClarifications on the Income Declaration Scheme, 2016X X X X Extracts X X X X X X X X Extracts X X X X ..... red. The Income Declaration Scheme Rules, 2016 (hereinafter referred to as the Rules ) have been notified. In regard to the scheme queries have been received from the public about the scope of the scheme and the procedure to be followed. The Board has considered the same and decided to clarify the points raised by issue of a circular in the form of questions and answers as follows.- Question No.1: Where an undisclosed income in the form of investment in asset is declared under the Scheme and tax, surcharge and penalty is paid on the fair market value of the asset as on 01.06.2016, then will the declarant be liable for capital gains on sale of such asset in the future? If yes, then how will the capital gains in such case be computed? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt then how will he come to know whether the notice has been issued? Answer: The declarant will not be eligible for declaration under the Scheme where the undisclosed income relates to the assessment year where a notice under section 142, 143(2) , 148 , 153A or 153C of the Income-tax Ac t has been issued and served on the declarant on or before 31st day of May, 2016. The declarant is required to file a declaration regarding receipt of any such notice in Form-1. Question No.4: In a case where the undisclosed income is represented in the form of investment in asset and such asset is partly from income that has been assessed to tax earlier, then what shall be the method of computation of undisclosed income represented by suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which has not been assessed under the Income-tax Act. Question No.6: Can a person against whom a search/survey operation has been initiated file declaration under the Scheme? Answer: (a) The person is not eligible to make a declaration under the Scheme if a search has been initiated and the time for issuance of notice under section 153A has not expired, even if such notice for the relevant assessment year has not been issued. In this case, however, the person is eligible to file a declaration in respect of an undisclosed income in relation to an assessment year which is prior to assessment years relevant for the purpose of notice under section 153A . (b) In case of survey operation the person is barred from making a declara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consequences under section 197(c) of the Finance Act, 2016 ? Answer: In respect of such undisclosed income which has been duly declared in good faith but not found eligible, then such income shall not be hit by section 197(c) of the Finance Act, 2016 . However, such undisclosed income may be assessed under the normal provisions of the Income-tax Act, 1961. Question No.10: If a person declares only a part of his undisclosed income under the Scheme, then will he get immunity under the Scheme in respect of the part income declared? Answer: It is expected that one should declare all his undisclosed income. However, in such a case the person will get immunity as per the provisions of the Scheme in respect of the undisclose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No.13: Will the declarations made under the Scheme be kept confidential? Answer: The Scheme incorporates the provisions of section 138 of the Income-tax Act relating to disclosure of information in respect of assessees. Therefore, the information in respect of declaration made is confidential as in the case of return of income filed by assessees. Question No.14: Is it necessary to file a valuation report of an undisclosed income represented in the form of investment in asset along with the declaration under the Scheme? Answer: It is not mandatory to file the valuation report of the undisclosed income represented in the form of investment in asset along with the declaration. However, the declarant should have the valuatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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