Union Finance Minister Arun Jaitley on Tuesday hit out at the opposition saying the government introduced the bill to amend the Income Tax law in view of preventing a few people who have been trying to convert black money into white after demonetisation. The bill was aimed at tackling black money, Jaitley said in Parliament. He also reiterated government’s stand on demonetisation saying, “PM Narendra Modi made a huge announcement on November 8 to fight the menace of black money and corruption in the country.”
Continuing with the crackdown on black money, the Narendra Modi government is looking to introduce a new tax structure for undisclosed income. The government is proposing to levy a total tax, penalty and surcharge of 50% on the amount deposited post demonetisation. A higher taxe and stiffer penalty of up to 85% will be levied on those who don’t disclose, but are caught. The new tax scheme will be called ‘Pradhan Mantri Garib Kalyan Yojana for income disclosure’. FM Arun Jaitley yesterday introduced a bill to amend the Income Tax law. Those who choose to declare their ill-gotten wealth stashed till now in banned 500 and 1000 rupee notes under the Pradhan Mantri Grabi Kalyan Yojana 2016, will have to pay a tax at the rate of 30% of the undisclosed income. Additionally, a 10% penalty will be levied on the undisclosed income and surcharge called PMGK Cess at the rate of 33% of tax (33% of 30%).
Further, the declarants have to deposit 25% of the undisclosed income in a scheme to be notified by the government in consultation with the Reserve Bank of India (RBI). The money from the scheme would be used for projects in irrigation, housing, toilets, infrastructure, primary education, primary health and livelihood so that there is justice and equality, said the Statement of Objects and Reasons of the Bill. For those who continue to hold onto undisclosed cash and are caught, existing provisions of the Income Tax law will be amended to provide for a 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.