The Income Tax Declaration Scheme (IDS) offered by the Indian Government has resulted in collection of around Rs 65,000 crore(over $9 billion) in black money. The scheme which ended on Sept. 30, offered people the chance to declare their undisclosed income and pay a penalty but avoid prosecution.
Finance Minister Arun Jaitley disclosed last week that the total amount declared under the scheme was Rs 65,250 crore from the 64,275 disclosures made. He said that the money will be directed to the consolidated fund of India and will be used for public welfare schemes. Jaitely reemphasized that no punitive action will be taken against the declarers.
India Today
In a statement Jaitley said
The department does not intend to be vindictive. Declarants will be treated under relevant tax laws, irrespective of filing under the Income Disclosure Scheme. Regarding the action henceforth, this is an issue of tax department. Individual taxmen will not take vindictive action
The IDS was launched in June 2016 and offered those with undeclared domestic income and assets a chance to declare the same without any prosecution. A rate of 45 percent would be levied on the income as the tax on it as well as a penalty. So if the income declared was Rs. 100 lakhs, Rs. 45 lakhs would need to be paid from it as tax and penalty. The tax department said that the tax has been taken from the money declared and not from other undisclosed assets.
As a part of the scheme, the tax department had contacted 700,000 persons thought to have evaded tax and urged them to declare hidden assets. The IDS is part of Prime Minister Narendra Modi’s efforts to fulfil one of his major election promises made in 2014 that he would crackdown on black money .
The IDS scheme however doesn’t address black money stashed away in foreign banks and locations. The Panama Papers highlighted the amount of wealth moved abroad by the wealthy – around 500 Indians were named in the documents including prominent industrialists and celebrities.
The government has been taking a number of steps towards clamping down on black money. Some of the major ones are include the mandatory quoting of the PAN number, agreements with foreign countries for exchange of information, improved detection and follow up in tax evasion cases. Improved tax collection systems have resulted in seizure of Rs.1,986 crores and tracking of undisclosed income of Rs.56, 378 crore over the last two years.
Upgrades of IT capabilities has also resulted in behind-the- scenes methods to identify tax evasion cases.
