With the black money window of PMGKY set to close soon, the I-T department today warned the stash holders to avail the scheme or face stringent action under Benami laws, adding that the defaulters’ names will also be shared with the central probe agencies. “The Pradhan Mantri Garib Kalyan Yojna (PMGKY) is the last available opportunity to come clean and avoid harsh steps (from the Income Tax department). After the scheme closes, stringent action will be taken against persons who have deposited unaccounted cash but failed to disclose it before the law,” a senior I-T officer said. The tax and penalty against those who hide their black money and fail to avail the PMGKY could go as high as 137 per cent of the cash deposits made, the officer said, adding the department will not shy away from slapping the newly enacted Benami Transactions Act against defaulters.
He said the Central Board of Direct Taxes (CBDT), the policy-making body of the I-T department, has recently asked the taxman to file prosecution cases against those who do not disclose their illegal deposits either under ‘Operation Clean Money’ or avail the PMGKY. “Such cases will be referred to the CBI, the Enforcement Directorate and other agencies so that they book such people under the anti-corruption and anti-money laundering laws which these agencies enforce,” he said.
Over 1,500 surveys have been conducted by the taxman across the country on those who have deposited substantial amount of cash in their or others’ bank accounts, with the majority of these operations (350) in Karnataka and Goa region and over 250 in Delhi. The official stated that some of the sectors which have been identified by the department for making huge unaccounted cash deposits include petrol pump owners, real estate developers, jewellers, depositors in cooperative societies, transporters and persons employing unorganised labour.
“The department has good information against such entities and a vigorous investigation supported by the latest data mining techniques and other tools will be done against such people,” he said. The official explained that a person or entity who opts for PMGKY will have to pay 49.9 per cent tax on the income, whereas a person who does not opt for the scheme but offers his black income in his Income Tax Returns will face a tax and penalty rate of 77.25 per cent, and one who does not offer his stash funds under the scheme but is caught with undisclosed income in scrutiny assessment will face 83.25 per cent tax rate.
For those who do not declare their stash under the PMGKY and are raided will face 107.25 per cent tax and penalty if the undisclosed income is surrendered during the action, while those who do not surrender such hidden income even during searches will stand to face the highest level of penalty and tax at 137.25 per cent. The Benami Act invites rigorous imprisonment of up to seven years and the violators also stand to be charged under the I-T Act, besides being liable to pay fine up to 25 per cent of fair market value of benami property and other penalties.
The Centre had come out with the PMGKY scheme after its decision to demonetise high value currency notes of Rs 500 and Rs 1,000 last year. Under the scheme, people can deposit their unaccounted cash in bank accounts till March 31 this year by paying 50 per cent tax plus penalty. A quarter of the total sum will also have to be parked in a non—interest bearing deposit for four years. The scheme had commenced on December 17 last.