Economy / Taxation / Tax Amnesty Schemes.
Tax Amnesty Schemes.
- Income Declaration Scheme (IDS 2016):
- Launched in 2016 as part of the union budget.
- Aimed at unearthing black money and bringing it into the formal system.
- Provided an opportunity for income tax and wealth tax defaulters to declare their assets, pay taxes, and a penalty to avoid litigation.
- Allowed individuals to come clean by disclosing their undisclosed income and assets.
- Pradhan Mantri Garib Kalyan Yojana, 2016 (PMGKY):
- Launched in December 2016, following the IDS.
- Provided an opportunity for individuals to declare unaccounted wealth and black money in a confidential manner.
- Allowed individuals to avoid prosecution by paying taxes, interest, and fines.
- Aims to bring undisclosed wealth into the formal economy.
- Sabka Vishwas-Legacy Dispute Resolution Scheme:
- Operational from 1st September 2019.
- Announced in the 2019-2020 Union Budget.
- Targeted legacy tax disputes related to service tax and excise duty before the implementation of GST.
- Aimed to free taxpayers from legacy tax issues.
- Components include amnesty and dispute resolution.
- Provided relief in tax dues with a full waiver of interest, fines, and penalties.
- Offered complete amnesty from prosecution.
- Provided relief of varying amounts based on the nature of the case.
Overall Impact:
- Tax amnesty schemes provide an opportunity for individuals to rectify their tax non-compliance and declare undisclosed income/assets.
- Encourage individuals to come forward, pay taxes, and contribute to the formal economy.
- Aims to reduce tax evasion, bring black money into the mainstream, and resolve legacy tax disputes.
Operation Clean Money 1 and 2:
- Operation Clean Money 1 (2017):
- Initiated by the Income Tax Department (ITD) in 2017.
- Involved the e-verification of large cash deposits made post-demonetization in 2016.
- Used data analytics to compare demonetization data with information in ITD databases.
- Identified individuals with cash transactions inconsistent with their taxpayer profiles.
- Information from banks was used to identify persons with inconsistent tax profiles based on their cash deposits during demonetization.
- Aimed to ensure compliance and identify individuals evading taxes.
- Operation Clean Money 2:
- Generally, subsequent operations build on the initiatives of the previous ones to enhance tax compliance and address tax evasion issues.
Vivad se Vishwas:
- Introduced in the 2020-21 union budget.
- Aims to provide relief to taxpayers involved in tax disputes.
- Taxpayers who pay the disputed tax within a specified period are granted a complete waiver of interest and penalties.
- Seeks to resolve tax disputes and encourage taxpayers to come forward and settle their tax matters.