EXPLANATORY NOTES ON PROVISIONS OF THE INCOME DECLARATION
SCHEME, 2016 AS PROVIDED IN CHAPTER IX OF THE FINANCE ACT, 2016
Introduction
The Income Declaration Scheme, 2016 (referred to here as ‘the Scheme’) is contained in the
Finance Act, 2016, which received the assent of the President on the 14th of May 2016.
2. The Scheme provides an opportunity to persons who have paid not full taxes in the
past to come forward and declare the undisclosed income and pay tax, surcharge and
penalty totalling in all to forty-five per cent of such undisclosed income declared.
Scope of the Scheme
3. A declaration under the aforesaid Scheme may be made in respect of any income or
income in the form of investment in any asset located in India and acquired from income
chargeable to tax under the Income-tax Act for any assessment year prior to the assessment
year 2017-18 for which the declarant had, either failed to furnish a return under section 139
of the Income-tax Act, or failed to disclose such income in a return furnished before the date
of commencement of the Scheme, or such income had escaped assessment by reason of the
omission or failure on the part of such person to make a return under the Income-tax Act or
to disclose fully and truly all material facts necessary for the assessment or otherwise.
Where the income chargeable to tax is declared in the form of investment in any asset, the
fair market value of such asset as on 1st June, 2016 computed in accordance with Rule 3 of
the Income Declaration Scheme Rules, 2016 shall be deemed to be the undisclosed income.
SCHEME, 2016 AS PROVIDED IN CHAPTER IX OF THE FINANCE ACT, 2016
Introduction
The Income Declaration Scheme, 2016 (referred to here as ‘the Scheme’) is contained in the
Finance Act, 2016, which received the assent of the President on the 14th of May 2016.
2. The Scheme provides an opportunity to persons who have paid not full taxes in the
past to come forward and declare the undisclosed income and pay tax, surcharge and
penalty totalling in all to forty-five per cent of such undisclosed income declared.
Scope of the Scheme
3. A declaration under the aforesaid Scheme may be made in respect of any income or
income in the form of investment in any asset located in India and acquired from income
chargeable to tax under the Income-tax Act for any assessment year prior to the assessment
year 2017-18 for which the declarant had, either failed to furnish a return under section 139
of the Income-tax Act, or failed to disclose such income in a return furnished before the date
of commencement of the Scheme, or such income had escaped assessment by reason of the
omission or failure on the part of such person to make a return under the Income-tax Act or
to disclose fully and truly all material facts necessary for the assessment or otherwise.
Where the income chargeable to tax is declared in the form of investment in any asset, the
fair market value of such asset as on 1st June, 2016 computed in accordance with Rule 3 of
the Income Declaration Scheme Rules, 2016 shall be deemed to be the undisclosed income.