Question

Q9) Which of the following statements about Income Declaration Scheme,2016 is/are correct?

1.The declared income would be taxed at the rate of 30 per cent plus ‘Krishi Kalyan’ cess of 25 per cent on taxes payable and a penalty at the rate of 25 per cent of the taxes payable.

2. No Scrutiny and enquiry under the Income-tax Act or the Wealth Tax Act shall be undertaken in respect of such declarations.

3. It also covers foreign income and assets

• A. a) 1 and 2 only
• B. b) 2 only
• C. c) 1 and 3 only
• D. d) All of the above

Answer 1

The correct option is A

a) 1 and 2 only

Answer 9: A
Explanation: The declared income would be taxed at the rate of 30 per cent plus ‘Krishi Kalyan’ cess of 25 per cent on taxes payable and a penalty at the rate of 25 per cent of the taxes payable. Thus the total tax to be paid will be 45% of the income declared under the scheme. No Scrutiny and enquiry under the Income-tax Act or the Wealth Tax Act shall be undertaken in respect of such declarations. Immunity from prosecution under the Income-tax Act and Wealth Tax Act is also provided along with immunity from the Benami Transactions (Prohibition) Act, 1988 subject to transfer of asset to actual owner within the period specified in the Rules. The scheme is part of Finance Act, 2016 and will remain in force till 30th of September. However, foreign assets or income to which the Black Money Act 2015 applies are not eligible for declaration under this scheme.