"While the penalty for voluntary non-disclosure definitely seems appropriate and is necessary, the Government would have to lay down monitoring mechanism for identification of such non-disclosure. Use of advanced techniques like Analytics, including areas like link analysis, social profiling & patterns and fuzzy matching as compared to traditional methods could lead to a better outcome," he added.
Meanwhile, Girish Vanvari, Partner and Head of tax at
He said - "It puts to rest the uncertainty on the penalties on the amounts deposited in the bank account post the announcement of demonetisation. A new voluntary disclosure scheme for the benefit of the poor has been introduced (Pradhan Mantri Garib Kalyan Yojana, 2016) pursuant to which past years’ undeclared income can be offered to tax at the rate of 30% plus surcharge of 33% plus penalty of 10% making it effective approximate rate of 50%. Further, 25% of this amount will need to be deposited in a specified deposit scheme for 4 years interest free. The remaining 25% can be freely used by the assessee. This will give one more chance to the assessee to come out clean and declare the right income. Further, unexplained credit not disclosed above will suffer a tax of 60% plus surcharge of 25% and penalty of 10% making it an effective rate of 85%. Thus, he will almost lose everything if he does not avail of the above scheme.."
Vanwari concluded saying that this amendment appears to be very strategic. "It could be a WIN- WIN, because if everything goes well, tax collections will go up substantially, further money will be raised in specified bonds for country’s investments needs and further, the assessee would also retain 25% of his undisclosed income to himself for future use. All in all, the chase against