Amongst the various new schemes and changes brought about by the Budget, 2016, one of the most talked about and significant change is Income Declaration Scheme, 2016 (" herein after referred to as "the Scheme" or "New Scheme" or "Disclosure Scheme, 2016" in the context in which it is required) . The Scheme which has come into effect from 1st June, 2016 vide notification dated 19th May, 2016 is expected to bring about a change in the manner of disclosure/declaration of undisclosed/undeclared income. The Scheme has been introduced as a separate chapter, Chapter IX, to Finance Act, 2016.Further, the government has notified the Income Declaration Rules, 2016(hereinafter referred as the Rules)to give effect to various provisions of the Scheme.
Presently, the penal consequences of not disclosing income (technically speaking concealment or furnishing of inaccurate particulars of income) are so harsh and rigid that they may act as a deterrence for the assessee, who might wish to disclose the income, though there may be various others reasons for not disclosing the true income. In view of this, introduction of new Scheme of Disclosure of Income is a welcome change.