Come September, Come Clean: BG Reddy appeals to tax payers
“Everything wrong, Gonna be all right, Come September”—these lines from Australian-British actor-singer Natalie Imbruglia’s famous Come September song today seem to hold good for tax payers who want to disclose and regularise their unaccounted assets through the Income Declaration Scheme-2016.
In fact, Mr B G Reddy, IRS, Principal Commissioner, Income Tax-1, Vizag Region, has come out with a more terse, more relevant line for these tax payers—‘Come September, Come Clean”.
For, these tax payers have time up to September 2016 to disclose and regularise their earlier unaccounted or under reported income, assets and investments.
Stating that the scheme is a golden one-time opportunity for these tax payers, he assures them of utmost secrecy and no harassment from his department. “My sincere appeal to tax payers of this region is to come forward and avail the benefits of this scheme as it is a one-time opportunity to come clean and join in the progress of the nation as honest tax payers,” he says.
In the same vein, Mr Reddy says stringent action will be taken against those tax payers who wilfully default on disclosure of their unaccounted income even after the scheme lapses on September 30.
New amendment, better response
Mr Reddy said the response to the scheme from the Vizag region is the best amongst the regions in the two States of Andhra Pradesh and Telangana.
In fact, the response improved last week, when the Government introduced a new amendment to the scheme, which will greatly reduce the burden on tax payers seeking to regularise their unaccounted or under-reported immovable property, like land.
Earlier, the value of the unaccounted property was taken as the prevailing market price of the land as of June 16, irrespective of the date when the transaction actually took place. In other words, even if the property was bought, say, ten years ago, the owner would have to pay tax on the prevailing market price if he wanted to regularise it through the scheme. “With land costs ballooning in recent years, these tax payers found it somewhat burdensome to pay tax at today’s rate. In the light of this, the Government has come out with the amendment,” he pointed.
Under the amendment, the value of the property will be on indexed cost, computed for capital gains. The Government has come out with a table of indexed costs, which is uniform across the country.
“With this amendment, the cost of the property will come down by one-third, which means a very significant relief for tax payers. I will say they (tax payers) cannot get a better deal than this,” Mr Reddy points out.
Another big benefit for tax payers availing the IDS is that they have to pay the tax, without any penalty or interest, in three instalments over the next one year. “This means that the effective tax rate will come down from the standard 45 per cent to about 38 per cent due to the staggering of payment,” he said.
Mr Reddy said the response from this region has been good—he has been getting between five and 10 enquiries every day.
The department had earlier sent out 10,000 notices to tax payers on the basis of suspicious financial transactions related to property, shares (especially penny stocks) and fraudulent capital gains. Out of these, non-PAN cases are 7,000—that is, these transactions were done without a PAN trail.
He however reiterated that stringent action, including prosecution, would be taken on tax payers who wilfully ignore the scheme beyond September.
Special teams, with officials from the department’s investigation wing, are being readied to search and investigate financial transactions, including immovable property transactions, deposits made in various bank accounts and share transactions, post September 30.
“There is no scope for tax payers to evade tax—the department is already in possession of voluminous information related to such transactions for various years,” Mr Reddy said.
“It is a wonderful opportunity for those who have undisclosed wealth. On top of it, high-level secrecy will be maintained and the information will not be even shared with other Central government agencies and not even in the certain sections of our office. The jurisdictional Principal Commissioner is the only point of contact for tax payers wanting the benefits of the scheme,” he added.