What if Income Disclosure scheme 2016 fails to collect sizable black money

As on date, no data is being shared by Government as to what has been the result of the Income Declaration Scheme (IDS), 2016. This may not be without any reason

Any lower figure than the one expected by the market will send wrong signals to the members in the public who may be planning to declare their black money

As we discussed in one of our previous article, that this unearthing of black money had been one of most popular “poll time jhoomla’ where in every one was promised Rs 15 lacs of cash back once black money was unearthed.

The Income Declaration Scheme, 2016 (IDS) was launched by CBDT on June 1^st 2016 wherein people were allowed to declare their undisclosed income after paying 45% of the tax on such income and in turn they were assured of all immunity against any action. The declaration was assured assured of all secrecy and would not be shared with any other department.

What if the scheme fails to garner sizable black money– By all means expect big crack down from Government. There is no doubt about the fact that with the strong IT systems in force, AIR returns coming in force, Government is really armed with large data to trace tax evaders. Once the deadline of 30^th September, 2016 is over, Government may come down heavily on all such taxevaders.

Recent raids are indicator to the events to come- With recent raids on jewelary shops in Chandigarh and few industrial houses in Ludhiana, Government is trying to send strong signals to either file the IDS or be ready for consequences. Current ad blitz also launched by Government to persuade members of public to declare the money is also being used to spread the word, or may we say drill down element of fear in the minds of tax evaders.

Government capturing data on various Non-PAN/Benami transaction- A senior CBDT official recently quoted that Tax authorities in the field have been armed with information from various sources and notices have been issued to many explaining transactions that have been captured. We have lots of information from various sources and it would be put to use. Recently Government has issued about 7 lac notices asking people to put their PAN numbers against their non-PAN transactions to collate the data and match the same with their Income Tax returns filed.

Benami Property Law­ Government has also recently announced that it is coming up with Benami Property Law. With this law coming up, avenues of parking cash in benami assets would get limited

The official said the benami law is also coming into effect soon and the avenues for parking or circulating cash will become more limited.

Information sharing with Other Countries- One of the best steps taken by Modi Government is that effective 2018, automatic information exchange with 28 countries would be put in place where even the transaction abroad would be collated with domestic ones and comprehensive data be reconciled with returns filed.