Demonetisation Explained
NEW TAX SCHEME FOR DEFAULTERS
Pay 50% tax on unaccounted deposits, or 85% if caught: Govt
New Delhi, Nov 28 (PTI) Providing a window to black money
holders, the government today proposed to levy a total tax,
penalty and surcharge of 50 per cent on the amount deposited
post demonetisation while higher taxes and stiffer penalty of
up to 85 per cent await those who don't disclose but are
caught.
Nearly three weeks after Prime Minister Narendra Modi
announced junking high denomination 500 and 1000 rupee notes,
Finance Minister Arun Jaitley introduced a bill to amend the
Income Tax law which also provides for black money declarants
a mandatorily depositing of 25 per cent of the amount
disclosed in anti-poverty scheme without interest and a
four-year lock-in period.
Those who choose to declare their ill-gotten wealth
stashed till now in banned 500 and 1000 rupee notes under the
Pradhan Mantri Grabi Kalyan Yojana 2016, will have to pay a
tax at the rate of 30 per cent of the undisclosed income.
Additionally, a 10 per cent penalty will be levied on the
undisclosed income and surcharge called PMGK Cess at the rate
of 33 per cent of tax (33 per cent of 30 per cent).
Further, the declarants have to deposit 25 per cent of
the undisclosed income in a scheme to be notified by the
government in consultation with the Reserve Bank of India
(RBI).
The money from the scheme would be used for projects in
irrigation, housing, toilets, infrastructure, primary
education, primary health and livelihood so that there is
justice and equality, said the Statement of Objects and
Reasons of the Bill.
For those who continue to hold onto undisclosed cash and
are caught, existing provisions of the Income Tax law will be
amended to provide for a flat 60 per cent tax plus a surcharge
of 25 per cent of tax (15 per cent), which will amount a levy
of 75 per cent.
Besides, if the assessing officer decides he can charge a
10 per cent penalty in addition to the 75 per cent tax. MORE
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