Clarification on payment under Income Disclosure Scheme, 2016

CBDT has released a clarification on 12th July, 2019 on certain procedural issues under section 195 of the Income Disclosure Scheme, 2016 regarding payment of third installment under the Scheme.

The Government in June 2016 introduced the Income Disclosure Scheme (Scheme) as an opportunity for all those people who hadn’t filed their taxes in the past. The new scheme called for the payment of a surcharge and penalty along with the actual tax that should have been paid on the undisclosed income. The person declaring the income would have to pay 30% as taxes on the undisclosed income along with a surcharge of 25% and a penalty at a rate of 25% of the tax to be paid. Cumulatively, 45% tax is applicable on the undisclosed income. Due date for payment of third installment was 30th September, 2017.

Bank holidays towards the due-date:

The stakeholders sought clarification from Board that since the next working day for Banks following 30th September, was 3rd October (as both 1st and 2nd October were bank holidays on account of National Holidays) the payments effected or completed on 3rd October would be considered as the on-time payment of the statutory liability or not.

The Board, following the provision under section 10 of the General Clauses Act, directed that the transactions affected and completed on 3rd October would be considered to have been completed on 30th September. Section 10 of the General Clauses Act provides that if an act is prescribed to be done in a prescribed time period and on the last day of such period the office or Court is closed, then the act if done on the next working day would be considered have been completed within the prescribed period. 

Delayed action on the part of the Banks:

Another contention raised was that several persons had made payments via cheques, RTGS, electronic transfers before due date. However, certain payments were endorsed to have been made after 30th September by the Banks. This could render the declarations under the Scheme void. Considering this the Board declared that the even the payments which were credited by 5th October would be deemed to have been done within the due date. The Board also instructed all the CITs and Pro-CITs concerned with the case to furnish a report to the Pro-DGIT after necessary verifications and to treat all such payments to have been paid by 30th September 2017.

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