Black money window: CBDT issues fresh FAQs; PAN mandatory

New Delhi: CBDT on Monday issued a set of fresh FAQs to clarify doubts about the processes of the one-time black money window as it stated that furnishing PAN number will be mandatory for the declarant while cases of non-filing of ITRs will be eligible to apply but with certain conditions.

This is the second set of clarifications or Frequently Asked Questions (FAQs) issued by the Central Board of Direct Taxes and this time a total of 11 queries have been answered as compared to 14 such answers released by the CBDT in May.

To a question if the Permanent Account Number is mandatory for making a declaration under the Income Declaration Scheme (IDS), the FAQ states a categorical "Yes".

"PAN is the unique identifier for all direct tax purposes. This is also necessary in order to claim the benefits and immunities available under the scheme," it said.

The Frequently Asked Questions (FAQs) added the IDS is "available to every person, whether resident or non-resident".

It said people against whom the I-T department has conducted searches and a notice under section 153A of the I-T Act for assessment of income "can be issued", such persons are not eligible to participate in the IDS.

It added that declaration of assets by a firm, which has been amalgamated or converted into Limited Liability Partnership (LLP), is to be made "in the name" of the said amalgamated company or LLP for the year in which such a conversion takes place.

The fresh clarifications said in case a summon has been issued by the taxman under the Non-filers Management System (NMS) exercise, which identifies people who do not file their Income Tax Returns despite having taxable income, but no notice for further action has been issued to a person, such cases are "eligible" to avail the IDS opportunity.

The FAQs also state that it is "necessary" for people or entities to attach the valuation report of the assets they are declaring under the IDS.

"A person shall not be eligible for the scheme (IDS) in respect of assessment years for which proceeding is pending at the Settlement Commission," it said.

The FAQs state in case someone makes a "part payment" of

the tax, surcharge and penalty on the black funds declared under the IDS, such a declaration shall be considered "invalid".

"The declaration under the scheme shall be valid only when the complete payment of tax, surcharge and penalty is made on or before November 30, 2016", which is stipulated date for payment of taxes after the four-month window closes in September. The window was opened on June 1.

Under the scheme, income as declared by the eligible persons would be taxed at the rate of 45 percent which is 30 percent plus a 'Krishi Kalyan Cess' of 25 percent and a penalty at the rate of 25 percent.

The scheme was announced by the government with an aim to pump out black money from the domestic economy.

Earlier, government had come out with a similar scheme for Indians holding undisclosed income abroad and a total of Rs 4,147 crore of undisclosed wealth was declared under it.

The IDS will apply to undisclosed income whether in the form of investment in assets or otherwise, pertaining to financial year 2015-16 or earlier.

Declarations under IDS can either be made online on the official e-filing website of the tax department or before various regional principal commissioners of I-T department.