Taxation Laws (Second Amendment) Bill introduced in Lok Sabha

Newsroom24x7 Staff

A scheme ‘Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016’ (PMGKY) proposed in the Bill

 

currency notesNew Delhi:  After the high denomination bank notes of existing series of denomination of the value of Rs.500 and Rs.1000 [Specified Bank Notes(SBN)] have been withdrawn by the Reserve Bank of India, concerns have been raised that some of the existing provisions of the Income-tax Act, 1961 (the Act) can possibly be used for concealing black money.

To address this issue, Taxation Laws (Second Amendment) Bill, 2016 (‘the Bill’) has been introduced in the Parliament today to amend the provisions of the Act to ensure that defaulting assessees are subjected to tax at a higher rate and stringent penalty provision.

Further, in the wake of declaring specified bank notes “as not legal tender”, there have been suggestions from experts that instead of allowing people to find illegal ways of converting their black money into black again, the Government should give them an opportunity to pay taxes with heavy penalty and allow them to come clean so that not only the Government gets additional revenue for undertaking activities for the welfare of the poor but also the remaining part of the declared income legitimately comes into the formal economy.

In this backdrop, an alternative Scheme namely, ‘Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016’ (PMGKY) has been proposed in the Bill. The declarant under this regime shall be required to pay tax @ 30% of the undisclosed income, and penalty @10% of the undisclosed income. Further, a surcharge to be called ‘Pradhan Mantri Garib Kalyan Cess’ @33% of tax is also proposed to be levied. In addition to tax, surcharge and penalty (totaling to approximately 50%), the declarant shall have to deposit 25% of undisclosed income in a Deposit Scheme to be notified by the RBI under the ‘Pradhan Mantri Garib Kalyan Deposit Scheme, 2016’. This amount is proposed to be utilised for the schemes of irrigation, housing, toilets, infrastructure, primary education, primary health, livelihood, etc., so that there is justice and equality.

Evasion of taxes deprives the nation of critical resources which could enable the Government to undertake anti-poverty and development programmes. It also puts a disproportionate burden on the honest taxpayers who have to bear the brunt of higher taxes to make up for the revenue leakage.

An overview of the amendments proposed in the Bill are placed below:

Overview of Amendments Proposed                                                       

PARTICULARS EXISTING PROVISIONS PROPOSED PROVISIONS
     
General provision for penalty PENALTY (Section 270A)

Under-reporting – @50% of tax

Misreporting – @200% of tax

(Under-reporting/ Misreporting income is normally difference between returned income and assessed income)

No changes proposed
Provisions for taxation & penalty of unexplained credit, investment, cash and other assets TAX  (Section 115BBE)

Flat rate of tax @30% + surcharge + cess

(No expense, deductions, set-off is allowed)

 

TAX  (Section 115BBE)

Flat rate of tax @60% +surcharge @25% of tax (i.e. 15% of such income). So total incidence of tax is 75% approx.

(No expense, deductions, set-off is allowed)

PENALTY (Section 271AAC)

If Assessing Officer determines income referred to in section 115BBE, penalty @10% of tax payable in addition to tax (including surcharge) of 75%.

Penalty for search  seizure cases Penalty (271AAB)

(i) 10% of income, if admitted, returned and taxes are paid

(ii) 20% of income, if not admitted but returned and taxes are paid

(iii) 60% of income in any other case

Penalty (271AAB)

(i) 30% of income, if admitted, returned and taxes are paid

(ii) 60% of income in any other case

Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016’ (PMGKY) New Taxation and InvestmentRegime Undisclosed income in the form of cash & bank deposit can be declared:

(A) Tax, Surcharge, Penalty payable

Tax                   @30% of income declared

Surcharge          @33% of tax

Penalty              @10% of income declared

Total                  @50% of income (approx.)

(B)  Deposit

25% of declared income to be deposited in interest

free Deposit Scheme for four years.

 

 

 

 

Mixed response to Opposition call for strike on demonetisation

Newsroom24x7 Staff

West Bengal Chief Minister Mamata Banerjee led a protest in Kolkata
West Bengal Chief Minister Mamata Banerjee led a protest in Kolkata

New Delhi: The opposition parties today held a nationwide agitation against the decision of the Modi-led NDA government to stop the use of high level currency notes in the country.

Altough it did not join the Opposition call for strike, the ruling Trinamool Congress in West Bengal led by chief Minister Mamata Banerjee today held a massive protest against the Modi Government in Kolkata and other parts of the State.

The strike call against demonetisation evoked mixed response in Bihar where workers of RJD, Congress and Left parties disrupted train services at many places. Road traffic and attendance in offices, banks and schools and colleges remained by and large unaffected.

According to available reports, train services were hit at Darbangha, Madhubani, Masauri in rural Patna, Ara, Jehanabad and other places. In Darbhanga, Ara, Masaurhi and Madhubani, CPI workers squatted on railway tracks.

The stir affected normal life also in states like Andhra Pradesh and Kerala.

Nabha jailbreak: Khalistani terrorist Harminder Singh Mintoo arrested near Delhi

Newsroom24x7 Staff

harminder-singh-mintooNew Delhi: Khalistani Liberation Force (KLF) Chief Harminder Singh Mintoo, who escaped from a high security jail in Punjab yesterday, was arrested today near Delhi.

Parminder alias Penda, who was arrested yesterday in Shamli district in western Uttar Pradesh hours after the jailbreak in which six prisoners, including KLF Chief Harminder Singh Mintoo had escaped, told the Police after he was nabbed that eight persons were involved in the incident and five of them were in Karnal and Panipat searching for a place to hide.He also said that he was oin touch with them through whatsapp.

Demonetisation: Rahul Gandhi, leaders of other parties protest outside Parliament

Newsroom24x7 Staff

rahul-gandhi-protestNew Delhi: The proceedings in both the Houses of Parliament were stalled today as there were noisy scenes and protest in the well over the demonetisation of high value currency notes and Opposition members’ demand that Prime Minister Narendra Modi should be present during the discussion on the issue.

Today, the Congress led by party vice-president Rahul Gandhi, along with many other Opposition parties also held a protest to observe ‘Akrosh Diwas’ against demonetisation, in front of Gandhi’s statue in the Parliament campus. Congress, JD(U), SP and BSP, BJD were seen at the joint Opposition protest outside Parliament but there was no MP from Trinamool at the Congress led protest.

Besides the Congress vice-president, and senior party leaders Jyotiraditya Scindia and Veerappa Moily, Supriya Sule of NCP, Kanimozhi of DMK, Mohd Salim of CPI(M) and JP Yadav of RJD participated in the protest near the Gandhi statute.