Govt gives black money holders one last chance, rolls out new income declaration scheme till March 2017Black money holders have been given one last chance by the government to come clean until March-end next year by paying 50 per cent tax on bank deposits of junk currencies made post demonetisation. Offering
Black money holders have been given one last chance by the government to come clean until March-end next year by paying 50 per cent tax on bank deposits of junk currencies made post demonetisation.
Offering tax dodgers confidentially and immunity from prosecution under the new tax evasion amnesty scheme - Pradhan Mantri Garib Kalyan Yojana (PMGKY) - which kicks in from tomorrow, Revenue Secretary Hasmukh Adhia today said non disclosure of deposits made in banks after the Rs 500 and Rs 1000 notes were junked will attract stiffer penalties as well as prosecution.
Not declaring the black money under the scheme now but showing it as income in the tax return form would lead to a total levy of 77.25 per cent in taxes and penalty. In case the disclosure is not made either using the scheme or in return, a further 10 per cent penalty on tax will be levied followed by prosecution, he said.
The disclosure scheme is part of The Taxation Laws (Second Amendment) Act, 2016, which was approved by the Lok Sabha earlier this month and has been assented by the President.
The Pradhan Mantri Garib Kalyan Yojana (PMGKY) will commence on December 17 and shall remain open for declarations up to March 31, Adhia told reporters here.
"Beginning tomorrow most of the banks will have challans to be filled for depositing tax for availing the PMGKY scheme. Only after payment of 50 per cent tax and setting aside the 25 per cent of the remaining undisclosed amount for 4 year, a person can avail the PMGKY scheme," he said.
Adhia emphasised that mere depositing of cash in banks will not convert black money into white. Taxes have to be paid.
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 recent Income Disclosure Scheme and other such plans wherein disclosures were made first and taxes were recovered later.
"We want people to come forward and declare on their own unaccounted cash/deposit. The moment all the deposits come by December 30 we will analyse the voluminous data that we get. We would scrutinise all the data in a non-intrusive manner so that the fear of 'Inspector Raj' is not there in the minds of people," he added.
Also, as the disclosures will be kept confidential, the holder of unaccounted cash need not disclose it in Income Tax Returns forms.
After the shock November 8 demonetisation announcement, the government allowed the junked Rs 500 and Rs 1000 notes to be deposited in bank accounts.
For those holding unaccounted cash, it offered new tax evasion amnesty scheme wherein 50 per cent tax will be charged on declarations and quarter of the total sum be parked in a non-interest bearing deposit for four years.
Adhia said: "Non declaration of undisclosed cash or deposit in accounts under the Scheme will render such undisclosed income liable to tax, surcharge and cess totalling to 77.25 per cent of such income if it is declared in the income tax returns.
"In case the same is not shown in the return of income a further penalty of 10 per cent of tax shall also be levied followed by prosecution."
The government, he said, through the Financial Intelligence Unit (FIU) is getting data about every single deposit in bank account. Also, Income Tax, Enforcement Directorate and other investigative agencies are keeping a close watch on the information.
"We have information from FIU regarding how much deposits have been made in dormant account, (zero-balance) Jan Dhan, urban cooperative bank, how much repayment of loans have been made in cash, RTGS transfers, withdrawal and hence I-T department has been successful on raids," Adhia said.
With the help of professional agencies, a thorough analysis of all deposits that come till December 30 will be done to try and join all the dots, he said, adding that raids conducted so far are based on information analysis.
Govt plans to track black money through emails
To get information on money launderers, the tax department has created a special email address where anyone can provide information about them.
"People who have knowledge of money launderers can give direct information to us. We have created a email id: email@example.com (for the purpose)," he said.
Adhia said President Pranab Mukherjee last night gave his assent to the Taxation Laws (Second) Amendment Bill and the Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016 scheme will open tomorrow and end on March 31.
CBDT Chairman Sushil Chandra said tax department is keeping an eye on all suspicious activities.
"So the assessees should know that their deposits in bank accounts are being watched. We are examining whether it is explained money or not. Therefore, they should come very very clean under this scheme which is the last window available for anyone," he said.