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91-1145562222
A comparative analysis of
new income declaration
scheme and settlement
scheme
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Purpose and Scope
The main purpose of the Scheme is to provide an
opportunity to persons who have not paid full taxes in
the past to come forward and declare the undisclosed
income and pay tax. The scope of the Scheme extends
to all assesses (Individual, HUF, Company, Firm, Any
other associations or any other persons). However,
persons who have been served notice under Section
142, or 143(2), or 148 or 153A or 153C of the Income
Tax Act, 1961("the Act" for Short) ,persons notified
under section 3 of Special Court (Trial of Offences
Relating to Transaction in Securities) Act, persons in
respect of whom proceedings under Chapter IX
(offences relating to public servants) and Chapter XII
(offences against property) of Indian Penal Code are
pending, persons accused under Unlawful Activities
(Prevention) Act or the Narcotic Drugs and
Psychotropic Substances Act, or Prevention of
Corruption Act have been kept out of the ambit of this
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The value of asset declared in the declaration shall not be chargeable to Wealth-tax for any
assessment year or years.
Declaration of undisclosed income will not affect the finality of completed assessment. The
declarant will not be entitled to claim re-assessment of any earlier year or revision of any
order or any benefit or set off or relief in any appeal or proceedings under the Income-tax Act
in respect of declared undisclosed income or any tax, surcharge or penalty paid thereon.
An imminent question that arises is whether there exists any provision(s) under the Act itself
regarding the disclosure of any additional income by the assessee in case he fails to furnish the
same in return filed by him and if the assessee wishes to disclose such income and its source
before the revenue authority?
Indeed there exists such a provision relating to 'settlement of case' contained in Chapter XIX- A
of the Act, which relates to settlement of case pending in case of an assessee, with condition
precedents being full and true disclosure of his income, payment of additional tax etc., on or
before the date of making application u/s 245C of the Act.
This article is a humble attempt at making a comparative analysis between the scheme
regarding the settlement of case and the new Disclosure Scheme, 2016 and drawing distinctions
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betweenCare
the two.
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