NEW DELHI: Persons who have earned money through corrupt practices cannot take advantage of the domestic black money disclosure scheme, says the Finance Ministry’s FAQ on Income Declaration Scheme issued today.
The four-month window which opens on June 1 provides an opportunity to people having undisclosed income to come clean by paying tax, penalty and surcharge totalling 45 per cent of fair market value.
The 14-Frequently Asked Questions (FAQs) further said declarations made will remain confidential as in the case of return of income filed by an assessee.
The declarant, it further said, will be liable for capital gains tax on sale of such assets in future.
On a question whether a person can declare undisclosed income which has been acquired from money earned through corruption, the FAQ said “No”.
The scheme will not apply in relation to prosecution of any offense punishable under the Prevention of Corruption Act, 1988.
“Therefore, declaration of such undisclosed income cannot be made under the scheme,” it said, adding such declaration will amount to misrepresentation of facts and hence void.
As per the FAQ, if a declaration is held as void, the provisions of the Income-tax Act will apply in respect of such income as they apply in relation to any other undisclosed income.
The scheme for domestic black money holders follows a similar one for those having undisclosed foreign assets.
The FAQ said it is not mandatory to file the valuation report of the undisclosed asset along with the declaration.
“However, the declarant should have the valuation report. While e-filing the declaration on the departmental website a facility for uploading the documents will be available,” it said.
The Finance Ministry said the FAQs are first part of series of taxpayer education series in the form of question and answers specifying details of the scheme and clarifying eligibility available under the same.
“These will be updated from time to time based upon feedback and further queries received,” it said.
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