Paintings, cars, houses from unaccounted money can be declared under new scheme

Any asset bought from unaccounted wealth, including house, land, jewellery, paintings and even cars can be declared under the government’s new black money compliance window.

“We want people to declare their income from any asset and pay tax. Any asset bought from unaccounted money can now be brought on the books and be accounted for,” Rani S Nair, Member, Central Board of Direct Taxes, said on Tuesday at a Talkathon organised on the Income Declaration Scheme, 2016. The scheme, which opens on Wednesday, provides a four-month compliance window to people with undisclosed income in the country to come clean by paying tax, penalty and surcharge of 45 per cent of fair market value.

However, people with unaccounted income from corruption, smuggling, drug peddling, criminal activities and violations of Foreign Exchange Management Act will not be eligible to declare their black money under the scheme, said CBDT Member SK Sahai.

He further said that gifts of over ₹50,000 received from any persons other than relatives can also be declared under the scheme, if it is from unaccounted money. “After this window closes, we will tax all unaccounted income,” he stressed.

Warning of stringent action against those who do not declare their black money, Singh said the CBDT was working on a new investigation tool that will compare third party information with the tax returns filed by an individual.

“This is Project Insight… the chances of being caught are higher now as technology is being warned,” she said. Nair also said the tax to GDP ratio needs to be increased from the current 10 per cent. This will be done through a two-pronged strategy of including the missing taxpayers and deepening the tax base, she added.

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