The government on December 16, 2017, announced a second income disclosure scheme named ‘The Pradhan Mantri Garib Kalyan Yojana’ to give another chance to tax evaders to come clean after paying 50% tax on depositing junk currencies in bank account.
- The move aimed at providing a second chance to black money holders to declare their income before March 31, 2017. The declaration made under the new scheme will also be kept secret.
- Revenue Secretary Hasmukh Adhia informed that the new scheme includes stricter rules and will start from December 17 and will run till March 31, 2017.
- The previous income disclosure scheme ended on 30 September, 2016, but the tax and penalty levied on black money in that scheme was lower than what is proposed in the new scheme.
Feature of the Pradhan Mantri Garib Kalyan Yojana
The scheme will allow people to deposit money in their accounts by paying 50 per cent of the total amount. Out of the 50% tax paid, 30 per cent will be used as tax, 10 per cent as penalty and 33 per cent of the taxed amount that is 10 per cent as Garib Kalyan Cess.
- In addition, the declarant will have to deposit 25% of the undisclosed income in a zero-interest deposit scheme that will be called Pradhan Mantri Garib Kalyan Deposit Scheme, 2016. This money will be utilized for developmental activities such as irrigation, housing, construction of toilets and infrastructure, primary education and primary health.
- The scheme is a part of the Taxation Laws (Second Amendment) Bill, 2016, passed by the Parliament on November 29 to amend the income tax laws to provide more strict penal tax after demonetization announced on November 8.
- As per the scheme, taxes will have to be paid first and then the scheme can be availed on production of tax receipt, unlike the first Income Disclosure Scheme and other such plans wherein disclosures were made first and taxes were recovered later.
- Also, as the disclosures will be kept confidential, the holder of unaccounted cash need not disclose it in Income Tax Returns forms.
- The scheme does not provide any immunity to the declarant in respect of detention under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, offence punishable under Chapter IX or XVII of the Indian Penal Code, the Narcotic Drugs and Psychotropic Substances Act and the Unlawful Activities (Prevention) Act.
- It also does not provide immunity from the Prevention of Corruption Act, the Prohibition of Benami Property Transaction Act, the Prevention of Money Laundering Act, the Special Court Act and the Black Money (Undisclosed Foreign Income and Assets and Imposition of Tax) Act, he clarified.