In an instruction (No.9 of 2016, dated 27th Sep 2016) issued by the Central Board of Direct Taxes (CBDT), clarified the ambiguities regarding the method of computing the undisclosed income in case of cash sales of a capital asset before June 1st, 2016.
The present circular expels all the confusion among the taxpayers regarding the method to be followed in determining the amount of undisclosed income required to be declared in case of capital asset acquired out of undisclosed income is sold before 01.06.2016 and the sale proceeds so received are held in cash.
In the above context, the CBDT clarified that the method for arriving at the amount of undisclosed income for a declaration under the Scheme is not in accordance with the provisions of the Act, but with the provisions of the Scheme and clarificatory circulars issued by the Board from time-to-time.
The Board also reiterated the provisions contained in section 183(2) of the Scheme that where the income chargeable to tax is represented in the form of investment in any asset, the fair market value of such asset as on 01.06.2016 shall be deemed to be the undisclosed income for the purposes of the Scheme. In this context, it may be noted that cash in hand is an asset for the purposes of the Scheme.
Read the full text of the instructions below.
