New Delhi: Under the Taxation Laws (Second Amendment) Act, 2016, which came into force on yesterday (15 December, 2016) and the linked rules notified today and placed in public domain, the Taxation and Investment Regime (disclosure scheme) for Pradhan Mantri Garib Kalyan Yojana, 2016 will become operational from Frday (17 December 2016) and will remain open for declarations up to 31 March 2017.
The Taxation Laws (Second Amendment) Act, 2016 has come into force on 15th December, 2016.
The Prime Minister in the morning stated that all political parties are sore because their cash reserves have been hit and in the afternoon the government said parties can deposit their old notes, no questions will be asked and no IT charged. Everyone knows that political parties are the biggest generators and users of black money.The common man feels betrayed and taken for a ride.
Declaration under the new Scheme can be made by any person in respect of undisclosed income in the form of cash or deposits in an account with bank or post office or a specified entity.
Tax at the rate of 30% of the undisclosed income, surcharge at the rate of 33% of tax and penalty at the rate of 10% of such income is payable besides mandatory deposit of 25% of the undisclosed income in Pradhan Mantri Garib Kalyan Deposit Scheme, 2016. The deposits are interest free and have a lock-in period of four years.
The income declared under the Scheme shall not be included in the total income of the declarant under the Income-tax Act for any assessment year.
The declarations made under the Scheme shall not be admissible as evidence under any Act (eg. Central Excise Act, Wealth-tax Act, Companies Act etc.). However, no immunity will be available under Criminal Acts mentioned in section 199-O of the Scheme.
Non-declaration of undisclosed cash or deposit in accounts under the Scheme will render such undisclosed income liable to tax, surcharge and cess totaling to 77.25% of such income, if declared in the return of income. In case the same is not shown in the return of income a further penalty @at the rate of 10% of tax shall also be levied followed by prosecution. It may be noted that the provisions for levy of penalty for misreporting of income at the rate of 200% of tax payable under section 270A of the Income-tax Act have not been amended and shall continue to apply with respect to cases falling under the said section.
The Taxation Laws (Second Amendment) Act, 2016 has also amended the penalty provisions in respect of search and seizure cases. The existing slab for penalty of 10%, 20% & 60% of income levied under section 271AAB has been rationalised to 30% of income, if the income is admitted and taxes are paid. Otherwise a penalty at the rate of 60% of income shall be levied.
The Scheme, Rules and Notifications are available on the official website of the Income Tax Department @ www.incometaxindia.gov.in
Any queries/clarifications relating to the Scheme may be emailed at firstname.lastname@example.org .