Income Declaration Scheme- Is It The End Of Limitation!

As the Narendra Modi led government has decided to tighten its grip over undisclosed income and correct the tax to GDP ratio, it has come out with the scheme called the Income Declaration Scheme ("IDS") to act as a window for all and sundry to disclose their past undisclosed income and assets. Amidst a host of representations being made by experts from all corners, CBDT on 14 July 2016 came out with a rather cryptic circular, being Circular No. 27 of 2016 in which it clarified the law of limitation being nullified by the provisions of the Finance Act, 2016. It clarified that the Scheme being a later law, would prevail over the provisions of the Income Tax Act, 1961. The clarification appears to be rather discomforting since it gives a blanket prevalence to the IDS over the provisions of the Income Tax Act, 1961. There are many underlying problems with the scheme.