Tag Archives: Black money

Government of India opens another window for disclosing black money

Newsroom24x7 Staff

currency notesNew 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 @ http://www.incometaxindia.gov.in

Any queries/clarifications relating to the Scheme may be emailed at ts.mapwal@nic.in .

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.

 

 

 

 

Shahdol by-election: Demonetisation and voters’ dilemma

Lalit Shastri

Katni-Anuppur Highway (Madhya Pradesh): These are villagers in a crowded queue outside a bank on Katni – Anuppur highway in Madhya Pradesh. This area falls in the Shahdol Parliamentary constituency where polling for by-election will be held on 19 November. Most of those one talked to said they were waiting endlessly to withdraw money to buy fertiliser. Some said they were also here yesterday but drew a blank. Most were heard cursing the Government of India decision to discontinue the use of ₹1000 and ₹500 notes as a futile attempt to curb black money. A local leader, who knew more than what most politicians think the villagers know said the poor are suffering but the “Seth log” (capitalists) and politicians, who invest their slush money in bullion, real estate, stock market, off-shore tax havens or havala are just not affected.

 

And now Demonetisation: Modiji, Please don’t let the bankers down

Newsroom24x7 Desk

currency notesNew Delhi: After the Modi Government’s hard hitting decision to discontinue the use of ₹500 and ₹1000 notes to address the issue of black money, a letter written on behalf of the bankers to Prime Minister Narendra Modi has gone viral on social media.

We reproduce the letter:

Dear Modi ji we The Bankers  are with you in your drive for black money.
But we have some questions :
No extra remuneration
No extra staff
No reward or appreciation

Every month or so you introduce one yojana and bankers make it a success with their diligence and hard work. For example , PMJDY, PMJJBY, PMSBY, APY, MUDRA Loans, PMSBY, SSY …. now Withdrawal of Rs 500 and Rs1000 currency.

And in return they only get long working hours, extra work pressure, more risk, frustration and health problems.

Banking job has become the most hectic, thankless risky and stressful job.
Bankers ignore their families just to serve people and to support country.

Our whole economy majorly depends on Banking sector.  Bankers demand respectable wages and 5 day Banking and a little appreciation and acknowledgement for sincere work.

You expect so much from Bankers so as they also expect from you to consider their reasonable demands.
We are always with you to support & perform.

Therefore please don’t let down the Bankers.

A connected post on social media talks of Reserve Bank of India and how it has gained.

rbi gateThe post says: RBI will make a profit of minimum 2 lakh crores.

The current currency notes as per RBI is 17.5 lakh crore. 86% is 500, 1000 notes that is 15.05 lakh crores.

If 20% does not come back profit of RBI is 3 lakh crore.

If 30% does not come back profit is 4.5 lakh crores.

The notes in circulation are a liability in RBI’s balance sheet; so what notes don’t come back is deducted from their liability and will be a profit. If as per normal practice this is declared as divided to the Government, our fiscal deficit of 3.5% of GDP at about 5.33 lakh crores can be reduced dramatically and even wiped out.
False notes issued by our enemies gets knocked out. Reducing terror funding.

Yes there have and will be difficulties, is it not worth it!!!