Centre offers another chance to declare illegal income
The Pradhan Mantri Garib Kalyan Yojana 2016 will extend till March 31, 2017. It carries a high penalty of 50% on disclosed income, with quarter of the sum to be deposited for 4 years with no interest
The NDA government on Friday announced the notification of a second income disclosure scheme, dubbed the Pradhan Mantri Garib Kalyan Yojana (PMGKY) 2016. The scheme will kick in on December 17, 2016 and would extend up to March 31, 2017.
“The declarations under the new black money disclosure scheme will be kept confidential; the information will not to be used for prosecution,” Revenue Secretary Hasmukh Adhia told the media, adding, “Beginning tomorrow most of the banks will have challans to be filled for depositing tax for availing the PMGKY scheme.”
Under the new scheme, a person will have to declare the unaccounted money and pay the tax, surcharge and penalty which would total to almost 50% of the total amount. In addition, 25% of the illegal income will have to be deposited into the Pradhan Mantri Garib Kalyan Deposit Scheme, 2016, which will not earn any interest and will be locked in for four years.
Not declaring the black money under the scheme but showing it as income in the tax return form would lead to a total levy of 77.25% in taxes and penalty. In case the disclosure is not made either using the scheme or in return, a further 10% penalty on tax will be levied followed by prosecution, he said.
Beginning December 17, most banks will have challans to be filled for depositing tax for availing the PMGKY scheme, where taxes will have to be paid first and then the scheme availed on production of tax receipt. This is unlike the recent Income Disclosure Scheme (IDS) wherein disclosures were made first and taxes were to be recovered later
Adhia said that mere depositing of cash in banks will not convert black money into white; taxes have to be paid. In the PMGKY, taxes will have to be paid first and then the scheme availed on production of tax receipt. This is unlike the recent Income Disclosure Scheme (IDS) and other such plans wherein disclosures were made first and taxes were to be recovered later.
The Centre had on November 28 introduced the Taxation Laws (Second Amendment) Bill, 2016 in the Lok Sabha. The Bill, which sought to amend the Income Tax Act, 1961 and Finance Act, 2016 and introduce the PMGKY 2016, was passed by the lower house the next day and was sent to the Rajya Sabha for its nod. But as the Rajya Sabha didn’t take up this money bill after more than 14 days, as per the Constitution, it was deemed to be passed by both the houses of Parliament. The President subsequently gave his assent to the legislation.
The first scheme—the Income Disclosure Scheme (IDS) that ended on September 30, 2016—saw unaccounted money declarations to the tune of around ₹65,250 crore. The IDS carried a total tax/cess/penalty of 45%. With the subsequent demonetisation drive and the continuous tax raids across the country, the Centre perhaps hopes most of the as yet undeclared money will make its way towards the scheme.
With PTI inputs.