Banks to accept IDS payments till 2017 without seeking source

Banks will accept tax payments under the Income Disclosure Scheme 2016 until September 2017 without seeking the source of funds or creating any hassles for the declarant.

IDS 2016, announced by finance minister Arun Jaitley in the union budget 2016, as a one-time opportunity for holders of unaccounted money to make disclosures by paying 45 per cent tax and penalty, was to remain open from June to September this year.

The first installment of the tax is due to be paid by November-end under the extended window.
 
The Indian Banks' Association (IBA) has now written a letter to all member banks to follow the directive clearly of not seeking source of funds.

"Accordingly, all the member banks are requested to make note of the...Time schedule and as directed accept payments under IDS, 2016 up to September 30, 2017 and also for such cases the banks should not seek source of funds," it said adding, "we request you to sensitise your branches accordingly".

It "has been alleged that the bank authorities are refusing to accept payment stating that since IDS, 2016 has closed on September 30, the banks cannot accept the challan beyond the date".

IBA has also referred to a recent CBDT communication to RBI, which cited a complaint from a declarant that he / she could not deposit the payment as a bank branch in Bengaluru allegedly refused to accept the tax and penalty as per plan of the Income Declaration Scheme (IDS) that ended on 30 September.

CBDT noted that the scheme stipulates that a minimum amount of 25 per cent of the tax, surcharge and penalty is to be paid by 30 November 2016; a further 25 per cent of the tax, surcharge and penalty is to be paid by 31 March next year; and the balance amount to be paid on or before 30 September 2017.

In advertisements published in national dailies on Sunday, the I-T department warned holders of unaccounted money that non-payment of the first installment of tax and penalty by 30 November will render declaration under IDS ''invalid''.

The IDS has so far received 64,275 income declarations disclosing Rs65,250 crore of unaccounted money over the four-month period, which is expected to yield about Rs30,000 crore in taxes to the government and allow black money holders to declare their cash holdings after paying a one-time tax of 45 per cent.