The numerous press conferences and clarifications notwithstanding, the Government's new Voluntary Disclosure of Income Scheme (VDIS) 1997 remains a maze. While the scheme says, for instance, that the rate of tax payable for individuals is a flat 30 per cent, there have been numerous articles which have explained how the effective tax can be much lower if wealth is converted into jewellery and declared as having been bought at an earlier date. Similarly, there is great confusion as to whether an individual can actually declare his income in 1996-97 as part of VDIS and avail of the flat 30 per cent rate.

It is questions such as these that this book attempts to throw light upon. Apart from the law itself, the authors make extensive use of old legal cases to throw light on aspects of the new VDIS law. As the authors put it: ``Though this scheme is the fourth in the last three decades, yet draftsmen hardly took any pains to frame the Scheme in a simple, clear and unambiguous language.'' In the event, the new law leaves several questions unanswered.

Some of these are:

whether foreign companies, subjected to a tax of 48 per cent, can avail the benefits of the scheme paying 35 per cent as for Indian companies;

while long-term capital gains are taxed at 20 per cent currently, one has to pay 30 or 35 per cent under the scheme;

how is the short and excess payment of tax likely to be treated?

Can one make a declaration for the assessment year 1997-98 under the VDIS instead of filing a regular return and get away by paying a lower tax rate? According to the book's authors, ``this is perfectly possible under Section 64(1)(b) of the Scheme, provided a return is filed, before the commencement of the Scheme.''

Another oft-asked question about the VDIS is whether declarations made under it are admissible as evidence in a court. While the Ministry of Finance has said it is not, the authors cite several cases to show where and in what form it may be admissible, or inadmissible. Another important issue which the VDIS book tackles extensively is that of the cases in which an individual is not allowed to avail of the VDIS. These include, cases where a ``search was initiated'' on an individual, or where a notice has been ``served upon''.

The authors also serve up little titbits which serve to illustrate how not enough homework has been done by those who drafted the scheme. Thus, for instance, the Finance Minister has said that ``interest and penalty will be waived''. But the point, according to the authors, is that since disclosure involves no assessment, the question of levying interest doesn't arise in any case!Clearly a must-read for those intending to utilise the scheme. A word of caution though -- despite the authors' best attempts, the book is not for the lay reader. The authors' attempts to illuminate the ``dark nooks and misty crannies'' of the VDIS will best be appreciated by chartered accountants and lawyers.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.