The Income Declaration Scheme, 2016 (hereinafter referred to as ‘the Scheme’) came into effect on 1st June, 2016. This "the Scheme" is recently amended by CBDT i.e. these rules may be called the Income Declaration Scheme, (Third Amendment) Rules, 2016 and Clarifications on the Income Declaration Scheme, 2016. The CBDT has issued three sets of FAQs vide Circular Nos. 17, 24, 25 & 27 of 2016.
The Highlights from such changes are as under:
- The CBDT has amended the valuation rules to determine fair value of property declared under IDS on basis of stamp duty valuation.
- Where loans, creditors, advances received, share capital, payables etc. are disclosed in the audited balance sheet but are fictitious in nature and cannot be directly linked to acquisition of a particular asset, then such fictitious liabilities can be disclosed under the IDS as such without linking the same with the investment in any specific asset.
- The income declared under the IDS for an earlier assessment year can be taken into account to explain the related transactions of the subsequent assessment years in assessment proceedings pending before the Assessing Officer provided there is a nexus between the two.
- No adverse action shall be taken against the declarant by the income-tax department solely on the basis of cash deposits made in banks consequent to the declaration made under the Scheme.
- The period of holding of immovable property declared under the IDS shall be taken on the basis of its actual date of acquisition and not from 1.6.2016.
- Payment made under the IDS can be made in cash to the banks. Thus, RBI has been requested to issue instructions to banks to allow payment of tax under the IDS in cash.
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