Despite implementing the 'carrot and stick' policy on the ground, the Income Tax department is struggling to get a positive response for its Income Declaration Scheme (IDS). The scheme, launched by the Central Government on June 1 to uncover black money, closes on September 30.

The department has been receiving several enquiries, but converting those into members of the IDS is becoming a challenging task. As per the IDS facility, one can pay 45 per cent tax under the scheme by cash in a bank and no enquiry will be made by any bank official.

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Even Principal Chief Commissioner of Income Tax, Mumbai, DS Saksena admits that the actual number of declarations till now is not too many under the scheme in Mumbai. "For us, the major challenge is coming from the real estate sector", Saksena told Indiatoday.in.

An analysis of the tax evasion cases by the tax department in 2015-16 had found that the real estate is one of the top sectors that generate black money. "Sectorial analysis in respect of admission of undisclosed income during searches conducted by the Income Tax department in the financial year 2015-16 indicates that the main sectors are manufacturing (31 per cent), real estate (29 per cent), trading (8 per cent), educational institutions (7 per cent) and so on," Santosh Kumar Gangwar, Minister of State for Finance, had told the Lok Sabha on July 29, 2016.

MANUFACTURERS SAY 'NO' TO IDS



A senior official from the IT dept confirmed to Indiatoday.in that top manufacturers in the western region were unwilling to accept the IDS, mentioning that it would not help them remain protected from other revenue officials such as those from service tax, sales tax and excise departments among others.

"Manufacturers are seeking immunity from the Income Tax department so that officials from other agencies do not touch them, once they join the IDS. In reality, the income tax department could not guarantee that, as there is a high possibility that these data might be shared by other agencies too", the official said.

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Sources have also confirmed to Indiatoday.in that leading builders and developers of Mumbai and Pune regions have decided to avoid IDS, until a 'further relaxation period' is given to them. 'Seeing its long-term impact, our heart is willing to join the IDS. But, seeing the liquidity situation, almost all the builders at present have said they are not ready to join this scheme", said Anand Gupta, former secretary of Builders Association of India.

SCHEME A FLOP IN REAL ESTATE



"The real estate business is not doing well. There is no flow of money and in such a situation, if a builder is asked to pay at least 25 per cent of the total taxable amount under IDS (beside paying regular income-tax returns) by September 30, it is very difficult. What we have suggested the department is to extend the deadline of September 30 to December 31, so that in these months, builder/developers could sell off their inventories etc., and bring the money back, but that is not happening", Gupta said.

The government, sometime ago, had extended the deadline for payment of tax and penalty under IDS and allowed declarants to pay the amount in three instalments by September 30 next year. The first instalment of 25 per cent under IDS 2016 will have to be paid by November, followed by another 25 per cent by March 31, 2017. The remaining amount will have to be paid to the exchequer by September 30, 2017.