 "Income disclosure schemes 20 years apart yield roughly the same")
Finance Minister Arun Jaitley’s Income Declaration Scheme (IDS) 2016 will collect a little over Rs 30,000 crore in taxes, whereas former finance minister P Chidambaram's Voluntary Disclosure of Income Scheme (VDIS) in 1997-98 garnered around Rs 10,000 crore.
Adjusted for inflation, the earlier scheme would have collected Rs 25,000 crore, according to Soumya Kanti Ghosh, chief economist, State Bank of India.
The tax rate, including cess and penalty, in this year’s income disclosure scheme was higher at 45 per cent against 30 per cent for individuals and 35 per cent for companies in 1997-98.
Assuming mostly individuals availed the VDIS, the scheme would have garnered Rs 37,000 crore in today’s rupees and if the tax rate was 45 per cent.
The 1997-98 scheme saw disclosures worth over Rs 33,679 crore by 475,000 individuals and companies. In 2016, the government received declarations from 71,726 individuals worth Rs 67,382 crore. The tax under IDS 2016 is to be paid in three installments till September 30, 2017.
The tax department has rejected two disclosures in this year’s scheme: Rs 13,500 crore by a businessman in Ahmedabad and Rs 2 lakh crore by a family in Mumbai.
Jaitley had earlier refused to compare tax collections under the two schemes, stating many assessees had paid tax in advance during the 1997-98 scheme because the scheme’s tax rates were the same as normal rates.
The government has come out with another income declaration scheme, the Pradhan Mantri Garib Kalyan Yojana, following demonetisation, allowing declarers to pay a 50 per cent tax on undisclosed income and depositing a quarter of the amount for four years.
"We have had several of these schemes, giving tax evaders the confidence that they will get away easily because enforcement is not good. But there will be little option under the demonetisation disclosure scheme and a higher amount may come in," said Neeru Ahuja, partner, Deloitte Haskins Sells.
