Managing black money through income declaration scheme 2016

Tax fraud and tax evasion represents a huge problem and affects each and every citizen. The problem knows no borders and can only be solved effectively with concerted, joint effort or through self regulation. One of the biggest contributing factor to the tax gap is the underreporting of income. The Budget 2016–17 has proposed to provide a limited period ‘Tax Compliance Window ’for domestic taxpayers to disclose undeclared income of previous years. This provision has now been incorporated in the latest Finance Bill 2016 and is referred to as The Income Declaration Scheme 2016 (TIDS-2016). This scheme provides an opportunity to all persons who have not declared income correctly in earlier years (or) who have not paid full taxes in the past to come forward and declare such undisclosed income(s) or assets. This paper focuses on various aspects of TIDS-2016.