The Income Declaration Scheme 2016 - No Further Clarification and No Extension

Central Board of Direct Taxes vide its PRESS RELEASE dated New Delhi, 2nd September, 2016 on the Subject : The Income Declaration Scheme 2016 has advised that:-

• All the major queries and concerns of stakeholders have already been addressed by issue of circulars (FAQs) and also to provide stability and certainty to the Scheme, it is envisaged that no further clarifications on the Scheme shall be issued.
• They have reiterated that the Scheme closes on 30.09.2016. 
• The extension of the scheme is out of question.

Income declaration Scheme has become very attractive after the amendments and announcements from Government. Take Full advantage of the Opportunity given by Government. For Planning and efficient implementation in a beneficial manner, contact CA Aastha Jain @ 99 999 03556.

They have also briefed what all has been the basic premise of the scheme alongwith the clarity issued till date on the concerns of various stakeholder :-

1. The Income Declaration Scheme, 2016 (the Scheme) provides an opportunity to persons who have not paid full taxes in the past to come forward and declare their undisclosed income and assets. 
2. The Scheme has come into effect from 1.6.2016 and is open for declarations up to 30.9.2016. 
3. The Income Declaration Scheme, 2016 Rules (the Rules) have been notified on 19.5.2016. 
4. The amount payable under the Scheme can be paid in instalments viz. 25% of the total amount payable by 30.11.2016; another 25% by 31.3.2017 and balance 50% by 30.9.2017.

In order to address concerns of the stakeholders and to clarify the queries relating to the provisions of the Scheme, the Rules have been amended from time to time and six set of circulars (FAQs) have been issued. The following major issues addressed through Rules and FAQs are as under:

• The information in respect of a valid declaration is confidential and shall neither be shared with any law enforcement agency nor shall be enquired into by the Income-tax Department.
• The assets declared under the Scheme are to be valued at cost of acquisition or at fair market price as on 1.6.2016 as determined by the registered valuer, whichever is higher. However, an option for valuation of registered immovable property on the basis of stamp duty value of acquisition adjusted with the Cost Inflation Index has also been provided.
• Credit for unclaimed TDS made on declared income shall be allowed.
• Neither any capital gains tax nor any TDS shall be levied on transfer of declared benami property from benamidar to the declarant without consideration.
• The amount of fictitious liabilities recorded in audited balance sheet and not linked to acquisition of an asset can be disclosed under the Scheme as such.
• The period of holding of declared registered immovable assets shall be taken on the basis of the actual date of registration.
• The valuation report obtained by the declarant from a registered valuer shall not be questioned by the department. However, valuer’s accountability will remain.
• No adverse action shall be taken by FIU or the income-tax department solely on the basis of the information regarding cash deposit made consequent to the declaration under the Scheme.
• No enquiry/investigation shall be made in respect of the undisclosed income and assets declared under the Scheme even if the evidence of same is found subsequently during course of search or survey proceedings (circular No.32 dated 01.09.2016).

Further, vide Circular No. 31 dated 30.8.2016 an option has been provided to the declarants to file the declaration under the Scheme electronically under digital signature with the Commissioner of Income-tax, Centralised Processing Centre, Bengaluru [CIT(CPC)]. In case the declarant exercises the said option the declaration shall not be shared with the jurisdictional Principal Commissioner/Commissioner under the Income tax Act.

Important Reference Links

• PM's speech in Mann ki Baat Regarding IDS ​​​​​​​​​​​​​​​​​​​​​​​​​​​
• Chapter-IX of the Finance Act, 2016 - Income Declaration Scheme, 2016​​​​​​​​​
• Income Declaration Scheme Rules, 2016​​​​​​​​​
• Income Declaration Scheme (Third Amendment) Rules, 2016 - Notification No. 74 !New ​​​​​​​​​
• Income Declaration Scheme (Second Amendment) Rules, 2016 - Notification No. 70 ​​​​​​​​​
• Income Declaration Scheme (Amendment) Rules, 2016 - Notification No. 60​​​​​​​​​
• Income Declaration Scheme, 2016 - Notification No. 59​​​​​​​​​
• Income Declaration Scheme, 2016 - Notification No. 32​​​​​​​​​
• Expalanatory circular
• Income Declaration Scheme, 2016 - Circular No. 32 of 2016 !New ​​​​​​​​​​​​​​​​​​​
• Income Declaration Scheme, 2016 - Circular No. 31 of 2016 !New ​​​​​​​​​​​​​​​​​​​
• Clarifications on the Income Declaration Scheme, 2016 - FAQ - Circular No. 29 of 2016 ​​​​​​​​​​​​​​​​​​​
• Clarifications on the Income Declaration Scheme, 2016 - FAQ - Circular No. 27 of 2016​​​​​​​​​​​​​​​​​​​
• Clarifications on the Income Declaration Scheme, 2016 - FAQ - Circular No. 25 of 2016​​​​​​​​​​​​​​​​​​​
• Clarifications on the Income Declaration Scheme, 2016 - FAQ - Circular No. 24 of 2016​​​​​​​​​​​​​​​​​​​
• Clarifications on the Income Declaration Scheme, 2016 - FAQ - Circular No. 17 of 2016
• Form for Income Disclosure - Form 1​​​​​​​​​​
• Form for Income Disclosure - Form 1 - User Manual​​​​​​​​​​​​​​​​​​​​​​​​​
• Challan for I​ncome Declaration Scheme - Challan No. 286​​​​​​​​​​​​​​​​​​​​​​​​​

​Press Release​

1. ​The Income Declaration Scheme 2016; 02-Sep-2016​​​​​​​​​​​​​​​​​​
2. ​The Income Declaration Scheme 2016- Rule amendment and issuance of FAQ- Clarification regarding; 18-Aug-2016​​​​​​​​​​​​​​​​​​
3. The Income Declaration Scheme 2016- Rule amendment and issuance of FAQ​; 18-Aug-2016​​​​​​​​​​​​​​​​​
4. The Income Declaration Scheme 2016 - Relaxation of time schedule for making payments under the Scheme; 14-Jul-2016​​​​​​​​​​​​​​​​​
5. The Income Declaration Scheme 2016 - Issue of further FAQs; 14-Jul-2016 ​​​​​​​​​​​​​​​​​
6. Issue of further clarifications (FAQs) under Income Declaration Scheme, 2016; 30-Jun-2016​​​​​​​​​​​​​​​​​
7. ​Prime Minister speaks on Income Declaration Scheme in Mann ki Baat; 26-Jun-2016​​​​​​​​​​​​​​​​​
8. The Income Declaration Scheme 2016- FAQs; 20-May-2016​​​​​​​​​​​​​​​​​
9. The Income Declaration Scheme 2016 to open from 1st June 2016; 14-May-2016 ​​​​​​​​​​​​​​​​​
10. The Income Declaration Scheme 2016 & The Direct Tax Dispute Resolution Scheme 2016; 12-May-2016 ​​​​​​​​​​​​​​​​​

Insolvency and bankruptcy code, 2016

Insolvency and bankruptcy code, 2016 is a Code having a collection of laws. Code has 255 sections divided into 5 Parts and received the assent of the President of India on May 28, 2016. The Code will bring amendment in the following 11 legislations:

1.    The Indian Partnership Act 1932

2.    The Central Excise Act 1944

3.    The Income Tax Act 1961

4.    The Customs Act. 1962

5.    Recovery of Debts Due to Banks and Financial Institutions Act, 1993

6.    The Finance Act 1994

7. The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002

8.    Sick Industrial Companies (Special Provisions) Repeal Act, 2003

9.    The payment and Settlement Systems Act 2007

10. The Limited Liability Partnership Act 2008

11. The Companies Act, 2013

Code also seeks to repeal the two Insolvency Acts of 1909 and 1920 and amend many of the existing statutes that govern insolvency proceedings. All proceedings pending under these acts are continued to be heard and disposed of by the concerned court and tribunals. Any prosecution instituted under the repealed enactments and pending immediately before the commencement of this Code before any court or tribunal will be governed by this code and shall continue to be heard and disposed of by the concerned court or tribunal.

Key features:

ü  Applicable to Insolvency of individuals, unlimited liability partnerships, Limited Liability partnerships (LLPs) and companies.

ü  Establishes:

1.    The Insolvency and Bankruptcy Board of India (IBBI) as the regulator to provide oversight over insolvency professionals, Insolvency Professional Agencies and Information Utilities.

2.    the National Company Law Tribunal (NCLT) as an adjudicating authority for company and Limited Liability Partnerships, and

3.    Debt Recovery Tribunal(DRT) as adjudicating authorities for individuals and partnership firms.

ü  Quick identification of financial distress and a 180-270 day plan to revive a company.

ü  Fresh start provisions apply only to debtors below the specified income/ asset/ debt threshold.

ü  If any financial creditor is not paid any amount, i.e. even for minor default, a creditor can apply for winding up of a Company to NCLT under Bankruptcy Code.

ü  An insolvency resolution plan prepared by the resolution professional has to be approved by a majority of 75% of voting share of the financial creditors. Once the plan is approved, it would require sanction of the Adjudicating Authority. If an insolvency resolution plan is rejected, the Adjudicating Authority will make an order for the liquidation.

ü  The Code proposes for a fast track insolvency resolution process for companies with smaller operations and completion period.

ü  All cases pending before Company Law Board shall be transferred to NCLT.

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