Considering the liquidity crunch around November, the government may extend the tax payment September 30 deadline and is discussing the period by which the compliance window to make the payment can be extended and also that taxpayers can pay tax and penalty in installments.
As per the Budget announcement, the four-month compliance window under the Income Declaration Scheme 2016 had opened on June 1. The scheme allows domestic black money holders to declare their undisclosed income, pay a tax and penalty of 45%, and avoid prosecution. The scheme applies to both residents as well as non- residents, as both these categories could have taxable income that can be declared under the IDS.
Recently, the Finance Minister Arun Jaitley met industry associations, CAs and tax professionals to understand their concerns around the compliance window. Various trade bodies too had asked for leniency in payment of taxes and sought extension of scheme to address the cash flow problem around November.
Both Prime Minister Narendra Modi and Finance Minister Arun Jaitley had urged tax payers last month to declare their black money. Jaitley had also assured them that they will not be subject to any scrutiny if they adhered to the compliance window. Last year the government came up with a similar scheme for persons having unaccounted black money abroad. Disclosures during that window were charged with a total tax and penalty of 60 per cent. A total of Rs 4,147 crore of undisclosed wealth was declared during the 90-day foreign black money compliance window that ended September 30