Finance minister Arun Jaitley announced on Saturday that 64,275 declarations had been made under the scheme which closed on September 30 after remaining open for four months.He said the figure is expected to go up once all the declarations are tabulated and verified. Based on the current number of declarations, the government is expected to get tax revenues worth Rs.29,362 crore, of which Rs 14,700 crore will flow into the government coffers by March and the remaining amount in the next fiscal year. Those who have availed of the scheme can pay the amount in two instalments up to September 30, 2017.
At the receiving end of taunts for not delivering on PM Narendra Modi's promise during the 2014 campaign to bring back black money , the government has taken a number of steps to unearth illicit money .The unprecedented response to the scheme is expected to bolster the government's fight against the menace and help it politically. The declarations are also seen as a major political success for the government which had faced criticism from its opponents who cited the muted response to a scheme from those with undisclosed wealth overseas last year, to claim that IDS was not going to fare better. The opposition parties had also targeted the government over the scheme.
Not surprisingly , the government celebrated the success.“I compliment all those who chose to be tax compliant in IDS-2016. This is a great contribution towards transparency & growth of the economy ,“ Prime Minister Modi said on micro blogging site Twitter. He complimented Jaitley , revenue secretary Hasmukh Adhia, CBDT chairperson Rani Singh Nair and their team for putting in a tremendous effort on all aspects relating to IDS-2016.“Congrats to them,“ said Modi.
Talking to reporters, Jaitley vowed to maintain the secrecy of the information gathered through the scheme. The amount realised as tax comes as windfall for the government, something it had not accounted for in the budget, with senior government officials saying no target was set for the tax department. It will provide a crucial cushion to the government to meet its revenue and overall fiscal deficit target this year.
The IDS came into effect on June 1, 2016, and provided an opportunity to those who had not paid full taxes in the past to come forward and declare their domestic undisclosed income and assets. The total levy was 45% with tax, penalty and surcharge. Jaitley said IDS could not be compared with the Voluntary Disclosure of Income Scheme of 1997, which yielded tax worth Rs.9,760 crore. He said the effective tax rate for the scheme was in single digit as valuation was based on 1987 prices. The FM said the average declaration under IDS worked out to Rs 1 crore per declarant, suggesting that IDS fared better despite a stiffer rate of 45%.
The tax department had mounted a huge campaign to ensure that the scheme was a success after the tepid response to the overseas black money scheme. The PM made several appeals to the general public to come clean on taxes due while the FM addressed stakeholders at many stations. More than 5,500 public meetings in various cities were conducted by the department.
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