As an attempt to keep “good interest” of tax payer to disclose black money under Income Disclosure Scheme 2016 alive in final two weeks of the scheme, Central Board of Direct Taxes (CBDT) on Friday said in a press release that media reports claiming “disappointing response of tax payer” are not based on “statements issued by the department” and “the last few days are expected to give good results.”
Earlier on Wednesday, Time of India reported disappointing performance of IDS 2016. As per the report, the total income disclosed under the scheme is just Rs 1000 crores till September first week which is observed as a big disappointment by the officials.
The report also said “revenue department” has lost hopes for “dramatic change” in the last two closing weeks of income disclosure scheme. Defending the media reports, CBDT released a statement next day and said good response is expected in the last few days.
According to the newspaper, in the hope of pushing up disclosures under IDS 2016, CBDT had already pushed numerous searches and survey operations all across the country by IT investigation units to identify suspected tax evaders and black money hoarders.
Following these efforts, a 150% of jump in the number of IT searches was seen in first four months of the current fiscal. Although the search drive could successfully cap assets worth Rs 3,000 crores but it failed to bring in enough for Income Disclosure Scheme.
As compared to 1997 Voluntary Disclosure of Income Scheme that capped simple tax of 30% on individuals and 35% on companies, 45% tax on IDS 2016 is too high and probably the primary reason for low level of disclosures, said the CBDT official. The 1997 scheme capped more than Rs 35,000 crore.
In 1998 government eased the path for those who were caught in IT raids as they could escape with the same tax liability even after a year, under a tax dispute resolution scheme that was a onetime settlement window. People could pay 30% tax and escape penalty. Even this year the Modi government has introduced the `direct tax dispute resolution scheme’ in the budget where tax payer can escape with a lower tax liability of 33%. So 45 % is a huge percentage for those who disclose under IDS.
While government has time and again reiterated the benefits of IDS 2016 and promised complete confidentiality of people who disclose under the scheme. Recently PM Modi also addressed nation to use the last chance to rid of black money, still the reports of low disclosure under the scheme is worth pondering. The government recently also announced that tax payer can declare till the midnight of 30th September 2016. The Reserve Bank of India also released its guidelines to banks to accept cash deposits for income discloser scheme.
Owing to significance of the income disclosure scheme 2016, CBDT had to chip in to rubbish the media reports and said in the statement that CBDT has so far “refrained from issuing any statement regarding number of declarations received, amounts declared or taxes paid under the Scheme” to ensure complete confidentiality. A formal CBDT declaration will be issued after the Scheme closes on 30th September, 2016, the statement said.