After the withdrawal of currencies of Rs.500 and Rs.1,000 Government of India proposed the changes in penalty clauses calling it as Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016’ (PMGKY).
These changes were done after there is a huge concern by many who holding black money that penalty will be higher or they have to suffer a lot. In the backdrop of this, Government came up and proposed these tax amendments.
Declare the undisclosed wealth under Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016’ (PMGKY)
If you declare the undisclosed wealth under Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016’ (PMGKY), then you have 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%).
Along with the above-said tax, penalty, and cess, the declarant will 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 utilized for the schemes of irrigation, housing, toilets, infrastructure, primary education, primary health, livelihood, etc., so that there is justice and equality. This is a FREE deposit scheme of four years.
If you hold undisclosed wealth and not declare it
If you hold undisclosed wealth and caught by IT department, then flat 60% tax plus a surcharge of 25% of tax (15%), which will amount a levy of 75%. Besides, if the assessing officer decides he can charge a 10% penalty in addition to the 75% tax.
Therefore it mounts to be more than 75% of the wealth which you have to pay on any such undisclosed wealth. Also, do remember that no expense, deductions, set-off is allowed.
The same is explained in below image.
Do note that this Taxation Laws (Second Amendment) Bill, 2016 introduced in Lok Sabha as “Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016’ (PMGKY). It is yet to be passed and then will be considered as act. Hence, let us wait what will happen.
You can read the information of the same HERE.
Refer our latest post related to demonetization-
- How to deposit or exchange old Rs.1,000 and Rs.500 cash?
- How to identify original or genuine Rs.2,000 and Rs.500 notes?
- Deposit of old Rs.1,000 and Rs.500 notes -Which transactions reported to IT Dept?