IDS scheme will be a golden opportunity
The new income disclosure scheme (IDS) launched by the Finance Ministry is a welcome development which will surely help easing out the tax burden on citizens and recovering the huge amount of black money abound across the country. Indeed, Union Finance Minister Arun Jaitley’s meeting with the industry chambers, associations, chartered accountants and professionals to discuss about the four-months IDS will definitely provide an opportunity to iron out the problems and allay the ‘fear of taxmen' for all concerned. It is the first such meeting that the Finance Minister had with the industry which is seen as a step forward in making a ‘people-friendly Income Tax Department' and bringing home a renewed hope that the ossified norms, rules and structures of the age-old IT Department could be changed in tandem with the global dynamics.
The IDS was introduced in the Union Budget for 2016-2017 and it came into operation from June 1. Recently, Prime Minister Narendra Modi had also asked people to declare their undisclosed income by September 30 to avoid punitive actions after the closure of the window of the IDS at the end of the four months. The Prime Minister had declared it as a ‘golden opportunity' to disclose ‘undisclosed sources of income' before the deadline through his monthly public address ‘Mann ki Baat'. It is significant that the Government is allowing black money holders to pay the tax with a penalty of 45 per cent. Further, it stated that there will be no enquiry into the sources of the unaccounted income and assets provided they come under voluntary disclosure.
The four-point strategy unleashed by the IT Department includes single point contact to ensure confidentiality, setting up of facilitation centres across the country, wide publicity and monitoring of the scheme at the highest level. It seems this strategy will make the disclosure scheme easier. In the meantime, the Central Board of Direct Taxes has issued a second set of clarifications regarding the IDS to simplify the doubts about the processes involved in it. It must be noted here that furnishing PAN is mandatory for black money holders and those who fail to make the IT returns by due date will be eligible to do it again but of course with certain conditions. It is hoped that the joint efforts mooted by various organs of the Ministry will probably be able to make a dent in the long held unaccounted money lying across the country which has a potential impact on running the country's economy.
At a time when the Government is making an effort to recover black money, it is disheartening that the IT Department's failure to ensure proper filing of 272 appeals, only under the jurisdiction of the Delhi High Court has by now resulted into the loss of hundreds of crores to the public exchequer. Unfortunately, in a recent order passed by a bench led by Justice S Muralidhar dismissed all the 272 cases citing ‘the extraordinary delay' on the part of the IT Department for taking time in rectifying the defects and refilling them in time. Ironically, these cases were pending before the court since 2012. Therefore, Jaitley must ensure timely action in such matters in future when the Government is pushing for broadening the tax base and for a stricture tax enforcement regime.