TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3,
SUB-SECTION (ii)]
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)
New Delhi, the 19th May, 2016
The Income Declaration Scheme Rules, 2016
NOTIFICATION
S.O. 1831(E)- In exercise of the powers conferred by sub-section (1) and sub-section (2) of section
199 of the Finance Act, 2016 (28 of 2016), the Central Board of Direct Taxes, subject to the control
of the Central Government hereby makes the following rules for carrying out the provisions of
Chapter IX of the said Act relating to the Income Declaration Scheme, 2016 namely :—
- Short title and commencement.
- (1) These rules may be called the Income Declaration Scheme Rules, 2016.
- (2) They shall come into force on the 1st day of June, 2016.
- Definitions.
- (1) In these rules, unless the context otherwise requires,—
- (a) “Act” means the Finance Act, 2016 (28 of 2016);
- (b) “Form” means a form appended to these rules;
- (c) “recognised stock exchange” shall have the same meaning as assigned to it in clause (f)
of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);
- (d) “registered valuer” means a person registered as a valuer under section 34AB of the
Wealth-tax Act, 1957 (27 of 1957);
- (e) “section” means a section of the Act.
- (2) Words and expressions used and not defined in these rules but defined in the Act, or the
Income-tax Act, 1961 (43 of 1961) or the rules made thereunder, shall have the meanings
respectively assigned to them in those Acts and rules.
- Determination of Fair market value
- (1) The fair market value of the asset shall be determined in the following manner, namely:—
- (a) the value of bullion, jewellery or precious stone shall be the higher of—
- (I) its cost of acquisition; and
- (II) the price such bullion, jewellery or precious stone shall ordinarily fetch if sold in
the open market as on the 1st day of June, 2016, on the basis of the valuation
report obtained by the declarant from a registered valuer;
- (b) the valuation of archaeological collections, drawings, paintings, sculptures or any
work of art (hereinafter referred to as artistic work) shall be the higher of—
- (I) its cost of acquisition; and
- (II) the price such artistic work shall ordinarily fetch if sold in the open market as on
the 1st day of June, 2016 on the basis of the valuation report obtained by the
declarant from a registered valuer;
- (c) the value of shares and securities of—
- (I) quoted share and securities shall be the higher of—
- (i) its cost of acquisition; and
- (ii) the price determined by taking—
- (A) the average of the lowest and highest price of such shares and securities
quoted on a recognised stock exchange as on the 1st day of June, 2016; or
- (B) the average of the lowest and highest price of such shares and securities
on a recognised stock exchange on a date immediately preceding the 1st
day of June, 2016 when such shares and securities were traded on a
recognised stock exchange, where on the 1st day of June, 2016 there is no
trading in such shares and securities on a recognised stock exchange;
- (II) unquoted equity shares shall be the higher of—
- (i) its cost of acquisition; and
- (ii) the value, on the 1st day of June, 2016, of such equity shares as determined in
the following manner, namely:—
the fair market value of unquoted equity shares =
(A+B - L) × (PV),
(PE)
where,
A = book value of all the assets in the balance sheet (other than bullion, jewellery,
precious stone, artistic work, shares, securities and immovable property) as
reduced by,- (i) any amount of income-tax paid, if any, less the amount of
income-tax refund claimed, if any, and (ii) any amount shown as asset
including the unamortised amount of deferred expenditure which does not
represent the value of any asset;
B = fair market value of bullion, jewellery, precious stone, artistic work, shares,
securities and immovable property as determined in the manner provided in
this rule;
L = book value of liabilities shown in the balance sheet, but not including the
following amounts, namely:—
- (i) the paid-up capital in respect of equity shares;
- (ii) the amount set apart for payment of dividends on preference shares and
equity shares;
- (iii) reserves and surplus, by whatever name called, even if the resulting figure
is negative, other than those set apart towards depreciation;
- (iv) any amount representing provision for taxation, other than amount of
income-tax paid, if any, less the amount of income-tax claimed as refund,
if any, to the extent of the excess over the tax payable with reference to the
book profits in accordance with the law applicable thereto;
- (v) any amount representing provisions made for meeting liabilities, other
than ascertained liabilities;
- (vi) any amount representing contingent liabilities other than arrears of
dividends payable in respect of cumulative preference shares;
PE = total amount of paid up equity share capital as shown in the balance-sheet;
PV = the paid up value of such equity share;
- (III) unquoted share and security other than equity share in a company shall be the
higher of,—
- (i) its cost of acquisition; and
- (ii) the price that the share or security shall ordinarily fetch if sold in the open
market on the 1st day of June, 2016, , on the basis of the valuation report
obtained by the declarant from a registered valuer;
- (d) the fair market value of an immovable property shall be higher of—
- (I) its cost of acquisition; and
- (II) the price that the property shall ordinarily fetch if sold in the open market on the
1st day of June, 2016 on the basis of the valuation report obtained by the declarant
from a registered valuer;
- (e) value of an interest of a person in a partnership firm or in an association of persons or
a limited liability partnership of which he is a member shall be determined in the
manner as specified in clause (f);
- (f) The net asset of the firm, association of persons or limited liability partnership on the
1st day of June, 2016 shall first be determined and the portion of the net asset of the
firm, association of persons or limited liability partnership as is equal to the amount of
its capital shall be allocated among its partners or members in the proportion in which
capital has been contributed by them and the residue of the net asset shall be allocated
among the partners or members in accordance with the agreement of partnership or
association or limited liability partnership for distribution of assets in the event of
dissolution of the firm, association or limited liability partnership, or, in the absence of
such agreement, in the proportion in which the partners or members are entitled to
share profits and the sum total of the amount so allocated to a partner or member shall
be treated as the value of the interest of that partner or member in the partnership or
association.
Explanation.— For the purposes of this clause the net asset of the firm, association of
persons or limited liability partnership shall be (A + B - L), which shall be determined
in the manner provided in sub-clause (II) of clause (c);
- (g) valuation of any other asset shall be higher of—
- (I) its cost of acquisition or the amount invested; and
- (II) the price that the asset would fetch if sold in the open market on the 1st day of
June, 2016.
Explanation— For the purposes of this rule,—
- (a) “quoted share or security” in relation to share or security means a share or
security quoted on any recognized stock exchange with regularity from
time to time, where the quotations of such shares or securities are based on
current transaction made in the ordinary course of business;
- (b) “unquoted share and security” in relation to share or security means share
or security which is not a quoted share or security;
- (c) “balance sheet” in relation to any company means the balance sheet of
such company (including the notes annexed thereto and forming part of
the accounts) as on 31st day of March, 2016, which has been audited by the
auditor of the company appointed under the Companies Act, 2013 (18 of
- and where the balance sheet as on 31st day of March, 2016 is not
audited, the balance sheet (including the notes annexed thereto and
forming part of the accounts) which has been approved and adopted in the
annual general meeting of the shareholders of the company.
- (2) Where investment in any asset is partly from an income which has been assessed to tax prior
to assessment year 2017-18, the fair market value of the asset determined in accordance with
sub-rule (1) shall be reduced by an amount which bears to the value of the asset as on the 1st day
of June, 2016, the same proportion as the assessed income bears to the total cost of the asset.
- Declaration of income or income in the form of investment in any asset.
- (1) A declaration of income or income in the form of investment in any asset under section 183
shall be made in Form-1.
- (2) The declaration shall be furnished:-
- (a) electronically under digital signature; or
- (b) through transmission of data in the form electronically under electronic verification
code; or
- (c) in print form, to the concerned Principal Commissioner or the Commissioner who has
the jurisdiction over the declarant.
- (3) The Principal Commissioner or the Commissioner shall issue an acknowledgement in Form-2
to the declarant within fifteen days from the end of the month in which the declaration under
section 183 has been furnished.
- (4) The proof of payment of tax, surcharge and penalty made pursuant to the acknowledgement
issued by the Principal Commissioner or the Commissioner shall be furnished by the declarant
to the such Principal Commissioner or Commissioner in Form 3.
- (5) The Principal Commissioner or the Commissioner shall grant a certificate in Form-4 to the
declarant within fifteen days of the submission of proof of payment of tax, surcharge along with
penalty by the declarant under section 187 of the Act in respect of the income so declared.
- (6) The Principal Director-General of Income-tax (Systems) or Director-General of Income-tax
(Systems) shall specify the procedures, formats and standards for ensuring secure capture and
transmission of data and shall also be responsible for evolving and implementing appropriate
security, archival and retrieval policies in relation to furnishing the form in the manner specified
in sub-rule(2).
Explanation.—For the purposes of this rule “electronic verification code” means a code generated
for the purpose of electronic verification of the person furnishing the return of income as per the
data structure and standards specified by Principal Director General of Income-tax (Systems) or
Director General of Income-tax (Systems).
FORM OF DECLARATION UNDER SECTION 183 OF THE FINANCE ACT, 2016, IN RESPECT OF THE INCOME
DECLARATION SCHEME, 2016
THE INCOME DECLARATION SCHEME RULES, 2016
Form 1
[See rule 4(1)]
To,
The Principal Commissioner/Commissioner
……………………………………
Sir/ Madam,
I hereby make a declaration under section 183 of the Finance Act, 2016. I give below the necessary
particulars:−
-
Name of the declarant ……………….………………………………………………………………………
-
Address: Office………………………………………………………………………………………………
………………………………………………………………………………….………………..…
E-mail…………………………………………………..Telephone No…………………………..
Residence…………………………………………………………………………...........................
……………………………………………………………………………………….………………
E-mail…………………………………………………..Telephone No………..………………...
- Permanent Account Number (PAN)
………..………………………
(In case PAN is not held, please apply for PAN and quote here)
- Status of the declarant
- (a) Whether individual, HUF, firm, company etc.
……………………………….
- (b) Whether Resident/Non-Resident/Not ordinarily resident
…………….…………………
- Details relating to assessment years for which the declaration is being made:
| Assessment year | Whether return of income filed (Yes/No) | If column (2) is Yes, furnish the income returned/ assessed | Assessing Officer (ward/ circle) if return filed in paper form |
|---|
| (1) | (2) | (3) | (4) |
| | | |
- Statement of undisclosed income
as per Annexure
- Total amount of declaration of undisclosed income
Rs………………………..
-
Tax payable thereon (@ 30% of item 7)
Rs.………………..……...
-
Surcharge payable thereon (@ 25% of item 8)
Rs.…………………..…...
-
Penalty payable thereon (@25% of item 8)
Rs..………………………
-
Tax paid, if any, on or before the date of declaration in
respect of items 8, 9 or 10 above
Rs.…………….…………
(Attach proof of payment and provide details below)
| Sl | BSR Code of Bank | Date of Deposit (DD/MM/YYYY) | Serial Number of Challan | Amount (Rs) |
|---|
| (1) | (2) | (3) | (4) | (5) |
| | | | |
- Balance tax payable
……………………………………….
VERIFICATION
I ……………………………………………….. son/daughter/wife of Shri……………………………………………..
(Full name in block letters)
(name of father/husband)
hereby solemnly declare that-
- (a) the information given in this declaration is correct and complete to the best of my knowledge and belief;
- (b) in addition to my own income in respect of the assessment year(s) for which the declaration is made,
income of other persons in respect of which I am chargeable to tax and income accruing or arising from
the assets held by me through any other person for which I had failed to furnish a return under section
139 of the Income-tax Act, 1961/which I had failed to disclose in a return of income furnished by me
before the commencement of the Scheme/which has otherwise escaped assessment, has also been
disclosed in this declaration;
- (c) the income of any other person in respect of which I am not chargeable to tax has not been included in
this declaration;
- (d) the provisions of clause (a) of section 196 of the Finance Act, 2016 in respect of Conservation of Foreign
Exchange and Prevention of Smuggling Activities Act, 1974 are not applicable to me;
- (e) the provision clause (b) of section 196 of the Finance Act, 2016 in respect of Indian Penal Code, the
Narcotic Drugs and Psychotropic Substances Act, 1985, the Unlawful Activities (Prevention) Act, 1967,
the Prevention of Corruption Act, 1988 are not applicable to me;
- (f) the undersigned has not been notified under section 3 of the Special Court (Trial of Offences Relating to
Transactions in Securities) Act, 1992;
- (g) the income declared is not chargeable to tax under the Black Money (Undisclosed Foreign Income and
Assets) and Imposition of Tax Act, 2015;
- (h) the income declared is not chargeable to tax under the Income-tax Act for any previous year relevant to
assessment year,-
- (i) where a notice under section 142 or sub-section (2) of section 143 or section 148 or section 153A or
section 153C of the Income-tax Act has been received in respect of such assessment year and the
proceeding is pending before the Assessing Officer;
- (ii) where a search has been conducted under section 132 or requisition has been made under section
132A or a survey has been carried out under section 133A of the Income-tax Act in a previous year
and a notice under sub-section (2) of section 143 of the said Act for the assessment year relevant to
such previous year or a notice under section 153A or under section 153C of the said Act for an
assessment year relevant to any previous year prior to such previous year has not been received and
the time for issuance of such notice has not expired.
- (i) the undisclosed income declared in the form of investment in benami property and existing in the name
of benamidar shall be transferred in the name of the real owner on or before 30th September, 2017, failing
which immunity under Benami Transactions (Prohibition) Act, 1988 shall not be available.
I further declare that I am making this declaration in my capacity as……………………………………………….
(Designation)
and that I am competent to make this declaration and verify it.
…………………………………………………..
(Signature)
Place………………….
Date…………………..
*Score out whichever is not applicable.
Annexure to Form 1
STATEMENT OF UNDISCLOSED INCOME
Description of undisclosed income and income declared in the form of investment in assets (use separate
sheet in case of multiple assets in the same category)
I. Total undisclosed income
| S.No. | Assessment year to which the undisclosed income pertains | Amount of undisclosed income (in Rs.) | Nature of undisclosed income |
|---|
| | | |
Total (to be taken to item 7 of the Form)
II. Whether any part of income referred in (I) above is in form of investment in asset
[ ] Yes
[ ] No
III. If reply to (II) above is Yes, furnish description of undisclosed income declared in the form of investment
in assets (Use separate sheet in case of multiple assets in the same category)
- Immovable property (attach valuation report)
- (i) Nature of property (land/building/flat etc.)
- (ii) Address of the property
- (iii) Name(s) under which held
- (v) Total acquisition cost
- (vi) Value as estimated by the registered valuer on
1st June, 2016
- (vii) Fair Market value as per Rule 3
- Jewellery (attach valuation report)
- (a) Gold
- (I) Purity ________, Weight _________, Value ____________
- (II) Purity ________, Weight _________, Value ____________
- (b) Diamond (1 carat or more)
- (I) Carat ________, Cut ______, Colour , Clarity, Value ________
- (II) Carat ________, Cut ______, Colour , Clarity, Value ________
- (c) Diamond (less than 1 carat) and other precious stones
Value __________
- (d) Other precious metals
Value__________
- Artistic work (attach valuation report)
- (i) Nature of artistic work
- (ii) Name(s) under which held
- (iii) Date of acquisition
- (v) Value of artistic work as estimated by the
registered valuer
- (vi) Fair Market value as per Rule 3
- Shares and securities
(a) Quoted shares and securities [Rule 3(1)(c)(I)]
(i) Description of security/share
(A) Name of issuer
(B) Number of securities/shares
(C) Type of security/share
(ii) Recognised exchange where quoted
(iii) Name(s) under which held
(iv) Cost of acquisition
(v) Date(s) of acquisition
(vi) Value as determined under Rule 3(1)(c)(I)(ii)
(vii) Fair Market value as per Rule 3
(b) Unquoted equity share [Rule 3(1)(c)(II)] (attach valuation report)
(i) Description of share
(A) Name of issuer
(B) Number of shares
(C) Type of share
(ii) Name(s) under which held
(iii) Cost of acquisition
(iv) Date(s) of acquisition
(v) Value as determined under Rule 3(1)(c)(II)(ii) __________________
(vi) Fair Market value as per Rule 3
(c) Unquoted shares and securities other than equity shares in a company [Rule 3(1)(c)(III)] (attach
valuation report)
(i) Description of share/security
(A) Name of issuer
(B) Number of securities/shares
(C) Type of security/share
(ii) Name(s) under which held
(iii) Cost of acquisition
(iv) Date(s) of acquisition
(v) Value as determined under Rule 3(1)(c)(III)(ii)
(vi) Fair Market value as per Rule 3
- Any other asset
(i) Description of asset
(ii) Name(s) under which held
(iii) Cost of acquisition/ investment
(iv) Date of acquisition/ investment
(v) Value as determined under Rule 3(1)(g)(II)
(vi) Fair market value as per Rule 3
- Total value of all the assets declared
- Deduction as per rule 4 of the Income Declaration Scheme Rules, 2016
(where part of asset acquired from income already assessed under
the Income-tax Act) (to be provided in respect of each asset separately)
- Deduction on account of investment made in the asset during the
previous year relevant to the assessment year for which a notice
u/s 142/143(2)/148/153A/153C of the Income-tax Act is issued
- Total undisclosed income declared in the form of investment in asset
(6-7-8)
IV. (1) Whether the undisclosed income referred in (I) above had ever been
credited in a bank account
(2) If Yes, details of such bank accounts
| Name and address of Bank | IFSC Code | Account holder name(s) | Account Number | Balance in the Account as on 01.06.2016 (if any) |
|---|
| | | | |
……………………………………………………..
(Signature)
……………………………………………………..
(Name)
Place………………….
Date………………….
NOTES:
-
If the total amount of tax, surcharge and penalty payable is not paid before 30th November 2016, the
declaration will be treated as void and shall be deemed never to have been made.
-
If the declaration is made by misrepresentation or suppression of facts it shall be void and shall be deemed
never to have been made.
-
If space provided is insufficient, separate enclosure may be used for the purpose.
-
In the last column of Table at Point (I) relating to nature of undisclosed income, specify the type of income viz.
house property income, business income, professional income, commission income, interest income etc.
Yes
No
