Sr. No.

VDS, 1976

VDIS, 1997 as compared to VDS, 1976

IDS 2016 as compared to VDIS, 1997


General: The Scheme can be divided into three parts: Search cases, Income disclosure and wealth disclosure and separate immunities and procedures were prescribed for each of the three class of declarations.

General: The VDIS, 1997 only provides for declaration of Income. Though in the original Finance Bill, 1997 as proposed and moved in the Parliament on 28-12-1997, clause 63 of the Finance Bill, 1997 provided for disclosure of Wealth, the same was dropped at the time of passing of Finance Act, 1997. Also, there is no provision for declaration in search cases.

General: IDS, 2016 is the same as VDIS,1997 in most aspects.


Section 3: Provisions are similar except for following points:

a) Flat rates of tax are prescribed only for companies. For all other persons, progressive tax rate on the basis of income disclosed is prescribed.

b) 5% of income declared had to be invested in specified securities.

c) All persons whose books, etc. seized during search u/s. 132 disqualified from making declaration in previous year in which seizure took place and all earlier years. There was no necessity that search must have been initiated against such person. If some books, etc. of such person seized even in search against some other person, the relevant years were denied immunity.

d) No such disqualification.

e) No such disqualification.

Section 64: It provides for declaration to be made and taxes to be paid and also the income which can be disclosed and assessment years for which disclosure can be made. The provisions are similar except for the following points:

a) Flat rates of tax on income disclosed is prescribed.

b) No provision for investment in any securities.

c) Only persons against whom search initiated u/s. 132 barred from immunity in respect of previous year in which search initiated and all earlier years. Even persons against whom notice u/s. 158BC r. w. s. 158BD issued not disqualified from making declaration.

d) A person disqualified from making declaration in respect of previous years in which requisition u/s. 132A made and all earlier previous years.

e) A person disqualified from making declaration in respect of previous year in which survey u/s. 133A carried out.

Sections 183, 184 & 185: Provisions relating to declaration of income. As compared to VDIS, 1997 following changes have been made:

a) If declaration of income is in form of assets, market value of such asset as on date of commencement of scheme being 1-6-2016 to be declared as income.

b) In addition to flat rate of tax @ 30%, cess @ 25% of tax is to be paid.

c) Also penalty @ 25% of tax is also levied.

d) Effectively amount payable would be 45% of income declared.

e) On issue of disqualification, scheme is different as discussed in context of section 196. Under VDIS, 1997 disqualification relating to search and seizure cases was provided in section 64 and disqualifications relating to Prevention of Corruption Act etc. were provided u/s. 78. Under IDS all types of disqualification is provided under section 196.


Section 4: The provisions are similar.

Section 65: It provides for form in which declaration to be furnished and the authority to whom it is to be filed. It also provides for the person who has to sign the declaration. Sub-section (3) provides that a person shall be entitled to make only one declaration.

Section 186: The provisions are the same.


Sections 5,6 and 7: They provide for time for payment of tax, extension of time, payment of interest, investment in securities and recovery in case of non- payment.

a) Sub-section (1) of section 5: Taxes shall be paid before furnishing declaration.

b) Sub-sections (2) and (3) of section 5: On application by declarant, the Commissioner of Income Tax may, if satisfied that declarant cannot pay due to reasonable and sufficient cause, extend time for payment of taxes or grant instalments.

c) Sub-section (4) of section 5: Time within which investment to be made in specified securities.

d) Section 6: Interest prescribed @ 12% p.a. for delay in payment along with procedure for payment.

e) Section 7: A declarant who has not paid or invested specified securities shall be deemed to be in default and all provisions for recovery proceedings under I.T. Act to apply accordingly.

f) Though no such specific provisions, courts have held that declarant shall not be entitled to immunity if taxes or interest not paid.

Section 66 and section 67: It provides for payment of tax on income declared and interest payable if payment delayed.

a) Section 66: Taxes shall be paid before furnishing declaration.

b) Sub-section (1) of section 67: If tax not paid before furnishing declaration, it can be paid any time before expiry of 3 months from the date of filing declaration. No application nor permission required.

c) No investment in securities required.

d) Sub-section (1) of section 67: Interest at 2% p.m. payable along with payment of tax if paid subsequent to filing of declaration. Interest mandatory and to be paid suo motu by the declarant.

e) No procedure prescribed for recovery of unpaid tax or interest.

f) Sub-section (2) of section 67: Declaration shall be deemed to be never filed under the scheme if taxes not paid.

Section 187: It provides that amount payable under the scheme shall be paid on or before the specified date and proof of payment shall be furnished to the CIT. Following are the difference as compared to the earlier scheme:

a) Unlike earlier scheme, amount is not payable before filing the declaration and therefore no interest is provided for delay in payment of amount due beyond the date of filing of declaration.

b) Under sub-section 3, it has been provided that in case of failure to pay the amount by due date, the declaration shall be deemed to have been never filed.


Section 8: Provisions are similar except that income not includible in total income in assessment of any of the following Acts:

a) Indian Income-tax Act, 1922

b) Income-tax Act, 1961

c) Excess Profits Tax, 1940.

d) Business Profits Tax, 1947

e) Super Profits Tax Act, 1963 or

f) Companies (Profits) Surtax Act, 1964

Section 68: Income declared cannot be included in total income of the any year under I.T. Act, 1961 subject to credit of income in books and payment of taxes. Also, Commissioner of Income-tax will issue certificate on application being made.

Section 188: Provisions are same except that there is no specific provision for passing entry in books of account.


Section 9: Provisions are similar.

Section 69: Declarant not entitled to claim relief or set off in respect of completed assessments.

Section 189: Provisions are the same.


Section 10: Provisions are similar.

Section 70: Taxes paid in pursuance of declaration not refundable.

Section 191: Provisions are the same.


Section 11: Declaration not admissible as evidence against declarant in penalty or prosecution proceedings under:

a) All Acts mentioned in section 8(1)

b) W.T. Act, 1957

Section 71: Declaration not admissible as evidence against declarant in penalty or prosecution proceedings under:

a) I.T. Act, 1961

b) W.T. Act, 1957

c) FERA, 1973

d) Companies Act, 1956

Section 192: Same immunity but only in respect of Income- tax Act, 1961 and Wealth-tax Act 1957.


Section 12: Provisions are similar except that details of investment in specified securities also to be treated as confidential.

Section 72: The declaration to be treated as confidential except to officers employed in execution of specified Acts.

No similar provision in the Act.


Section 13: Provisions are similar except clause (iii) of section 73(1) of VDIS, 1997 regarding jewellery and bullion is newly inserted.

Section 73: Assets acquired out of income declared is exempt from Wealth tax subject to certain conditions.

Section 194: Provisions are the same.


Section 14: A person disqualified u/s. 3 from making declaration due to seizure of books, etc. u/s. 132 could make declaration u/s. 14 under which limited immunities were provided.

No such provision.

No such provision.


Section 15: A person could make declaration in respect of wealth underassessed or escaped assessment.

The scheme primarly related to declaration of wealth acquired out of income disclosed in regular course. Limited immunities were provided.

No such provision though in Finance Bill, 1997 as proposed originally, clause 63 provided for similar wealth declaration.

No such provision.


Section 16: Immunity was provided from certain provisions of Gold Control Act and Customs Act, 1962 if income declared u/s. 3 or wealth declared u/s. 15 represented gold subject to certain conditions.

No such provision.

No such provision.


Section 17: Provisions are similar.

Section 74: Provisions of Ch. XV and section 189 of I.T. Act and Chapter 5 of W.T. Act to apply.

Section 195: Provisions are the same.


Section 18: Provisions are similar.

Section 75: Immunity under the scheme not available to person other than declarant.

Clause (a) of section 197: Provisions are the same.


Section 19 : Provisions are similar.

Section 76 : Power to Central Government to remove difficulties.

Section 198: Provisions are the same.


Section 20: Provisions are similar.

Section 77: Power to make rules given to Central Board of Direct Taxes.

Section 199: Provisions are the same.


Section 21: Similar provisions except that only persons against whom COFEPOSA detention order made denied the benefit of the scheme.

Section 78 : It provides that provision of scheme shall not be available to certain persons and in respect of prosecution of certain offences.

Section 196: Clauses (a), (b) and (c) of section 196 are same as in earlier scheme. a) Clause (d) provides that scheme shall not apply to undisclosed foreign income or asset liable to tax under Black Money (Undisclosed Foreign Income Assets) and Imposition of Tax Act, 2015.

b) Clause (e) provides for disqualification similar to, but broader than, disqualification provided by section 64(2) of VDIS, 1997. Declaration cannot be made for year for which notice u/s. 142 or 143(2) or 148 or 153A or 153C has been issued. Declaration cannot be made where search u/s. 132 or requisition u/s. 132A or survey u/s. 133A has been carried out for assessment which notice u/s. 143(2) or 153A or 153C though not issued but time to issue such notice has not expired.


No such immunity

No such immunity

Section 190: Immunity has been provided from provisions of Benami Transactions (Prohibition) Act, 1988 in case investment in asset is declared and asset is transferred in name of the declarant.


No similar provision

No similar provision

Section 193: Where a declaration is made by representation or suppression of facts, the declaration shall be void and deemed to be never made.


No similar provision

No similar provision

Section 197: Three clauses to section 197 provide as follows:

a) Clause (a) provides that benefit of the scheme shall not be available to person other than the declarant.

b) Clause (b) provides that where amount due under the scheme is not paid than income disclosed shall be treated as income of the previous year in which declaration is filed.

c) Where any undisclosed income or asset has accrued or arisen prior to commencement of the scheme and declaration is not made, then it shall be treated as income of the year in which notice u/ss. 142, 143(2) or 148 or 153A or 153C is issued and provisions of Income -tax Act 1961 shall apply accordingly.

The above note is merely intended to provide a comparison between provisions of three different schemes and should not be read as a treatise on any specific scheme. It is for academic discussion only.

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