The four-month compliance window for domestic blackmoney holders is not an amnesty scheme, Finance Minister Arun Jaitley said on Monday.
“There is monumental income tax law changes which I have made... It’s not a VDIS (Voluntary Disclosure of Income Scheme) and it is not an amnesty,” Mr. Jaitley said in an interview.
Presenting the Budget 2016-17 in Parliament, the Finance Minister said he wanted to give an opportunity to earlier non-compliant to move to the category of compliant as he proposed a limited period compliance window for domestic tax payers to declare undisclosed income represented in any form of assets.
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One can clear up past transgression by paying tax at 30 per cent, a surcharge at 7.5 per cent, a penalty at 7.5 per cent which is total of 45 per cent of undisclosed income.
Elaborating on the proposal, Mr. Jaitley said: “Inequality arises in amnesty, where under certain exemptions, you as a honest tax payer has paid 30 per cent and I come and join after 20 years and say that I would also pay 30 per cent”.
Amnesty, he said, is that 1996 VDIS and the present scheme is not structured that way.
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“This is not structured that way. You pay 30 per cent tax and 7.5 per cent and another 7.5 per cent, which is 45 per cent, ending up paying one and a half times more.
“So you are paying penalties for not paying tax on time. This is intending to bring some money from outside the system to into the system,” the minister said.
The government plans to open the compliance window under the Income Tax Disclosure Scheme from June 1 to September 30, 2016 with option to pay amount due within 2 months of declaration.
In the last Budget, the government had come out with similar compliance window for people holding undisclosed assets abroad.