IDS 2016- How to infuse interest of tax evaders?

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Customer Care No. 91-11-45562222
IDS 2016- How to infuse interest of tax evaders?
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• The Income Declaration Scheme 2016 (IDS) meant to
  garner taxes on undeclared incomes has not
  enthused public interest at large so far
  essentially considering the 45 payout and in all
  fairness may not actually culminate into a big
  kitty for the Government of India unless certain
  immediate corrective measures are taken. The
  publicity starts with the words ' your
  undisclosed income is like a time bomb' may even
  sound intimidating to those who may have missed
  on account of payment of taxes either
  deliberately or habitually or by mere ignorance
  or for any other selfish reason. Actually the
  scheme purpose should be to provide a fresh start
  to those people to come in the frontline of the
  group of people who had been paying their taxes
  honestly only with a sense of realization that
  they are the potential tax payers. Consider the
  immunity being given here as akin to immunity
  being also given to a start up business. Both
  according to me count as potential tax payers to
  the Country and must be viewed alike. In fact the
  person declaring income is more reassuring than a
  start up business in real sense as the start up
  may not actually yield to additional tax
  revenues.

Customer Care No. 91-11-45562222
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• Apart from the widest forms of publicity it is
  absolutely necessary to make the scheme broad
  based and assessee friendly in its cast. It is
  necessary to provide reassurances more than
  anything else to all those who have not
  contributed to the tax exchequer in the past that
  they would not be bothered not only viz a viz
  income declared under the scheme but also on
  income so declared by them in the past for the
  years for which a declaration is being made. A
  three pronged approach is therefore needed to
  bring sure success to the Income Declaration
  Scheme 2016.
• Approach No. 1- No scrutiny/reopening of years
  for which declaration is made
• The Government of India needs to provide complete
  immunity in the previous years of income
  declaration so to say to build confidence of each
  such declarant. It is quite important to note
  that each such declarant would be a potential tax
  payer and therefore it is necessary to provide
  level playing field to the declarant to come
  forward in the larger taxpaying group in the way
  forward.
• Approach No 2--Flexibility to submit more than
  one declaration/to revise declaration during
  scheme period
• The Scheme should be enabling one to provide
  total flexibility to the person declaring
  undisclosed income. For instance he or she should
  have the flexibility to file, rectify, resubmit
  the declaration as many times as he or she
  desires although within the scheme period. Even
  the person declaring income must be given an
  option to withdraw the same at any time during
  the period of the scheme without any questions
  being asked on the same.

Customer Care No. 91-11-45562222
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• For instance section 191 of Chapter IX of Finance
  Act, 2016 provides that any amount of tax and
  surcharge paid under section 184 or penalty paid
  under section 185 in pursuance of a declaration
  made under section 183 shall not be refundable.
  This kind of provision is undesirable. Hence,
  CBDT must issue a clarification in this regard to
  afford revise declaration and refund for any
  excess tax paid.
• Again section 193 says that a declaration shall
  be void and shall be deemed never to have been
  made under this Scheme in the event of
  misrepresentation or suppression of facts. Again
  it is not wise to consider a declaration as void
  in any situation given that the person signing it
  upfront makes a statement of fact. Even if there
  is suppression you have to believe it on its face
  since the same is voluntary in nature. It is not
  justifiable to use a declaration made by a
  declarant only against him. The Board may issue a
  clarification in this regard for the declarant.
• Approach No 3--Immunity from indirect taxes
• A person who declares income under Income tax Act
  would wonder whether he would be asked to pay
  taxes on the income declared under indirect tax
  regulations such as VAT or service tax as there
  is every possibility of him being cornered
  tomorrow on the basis of declaration made under
  the Income Declaration Scheme 2016. The FAQs do
  not provide any clarity in this regard. Much to
  the confusion in their answer to FAQ No. 2
  in Circular No 25 dated 30th June 2016 the only
  assurance given is a for non sharing of
  declaration without grant of any immunity under
  other economic laws including Service Tax, VAT,
  Companies Act, SEBI Act regulations etc.

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