Voluntary disclosure scheme kicks off

The government on Wednesday announced the launch of the much-publicised voluntary disclosure of Income Scheme '97 under which tax declaration for undeclared income can be made at the lowest rate applicable -- 30 per cent for individuals and 35 for corporate houses.

Central Board of Direct Taxes Chairman Ravi Kant said the scheme will become operational from July 1 and will run for six months, ending on December 31, 1997.

Kant said though the government had not set any target for the amount to be collected under the scheme, he expected ''100 per cent integration of the parallel economy with the mainstream''.

He assured that complete confidentiality would be maintained about the declarations. Any person availing the scheme would be immune from the Foreign Exchange Regulation Act, Income Tax Act, Wealth Tax Act. Instead, the Companies Act would be extended to him and he would be treated at par with other tax-paying citizens.

He clarified the scheme could be availed by even those against whom FERA enquiries are pending; but those against whom detention orders have been passed would not get any amnesty.

VDIS, which Finance Minister P Chidambaram announced in his budget, aims at increasing tax collections by lowering the marginal rate of taxation.

Under the scheme, a person can disclosure his taxable income for any assessment year for which he has failed to furnish a return under section 139 of the IT Act, 1961; failed to disclose in a return of income furnished by him before the date of commencement of the scheme (July 1, 1997); or has escaped assessment.

VDIS' secrecy and immunity, however, will not apply to any person against whom an order or detention has been made under (a) the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974, (b) who is to be prosecuted for an offence punishable under the Indian Penal Code, the Narcotic Drugs and Psychotropic Substances Act, 1985, the Terrorists and Disruptive Activities (Prevention) Act, 1987, the Prevention of Corruption Act, 1988, or for enforcing any civil liability.

Further, the immunity will not be available to any person notified under section 3 of the Special Court (trial of offences relating to transaction in securities) Act, 1982.

A person is not allowed to make a disclosure for a previous year in which a search has been initiated -- or requisition made -- under section 132. Neither can he disclose income for any year prior to that.

The government plans to push the scheme vigorously all over the country for which it has retained top marketing professionals.