Government has proposed a new income disclosure scheme under the name of Pradhan Mantri Garib Kalyan Yojna [PMGKY] 2016 to pluggin certain loopholes under the Income Tax Act. The scheme proposes to amend sections 115BBE, 271AAC and 271AAB thereby hiking penalties on unaccounted cash credits and undisclosed income.
Declaration Under PMGKY
An assessee who declares unaccounted income under PMGKY 2016, will have to bear total levy of 49.90 % on such income :
1. Tax @ 30% on disclosed income
2. Surcharge @ 33% on tax paid [ie. 9.9% on disclosed income]
3. Penalty @ 10% on disclosed income
Further, 25% of the disclosed income will have to be compulsorily placed in interest free deposit scheme for 4 years.
This amount is proposed to be utilised for the schemes of irrigation, housing, toilets, infrastructure, primary education, primary health, livelihood and other social causes to maintain justice and equality.
Taxation under Section 115BBE
In order to strengthen the demontisation scheme, following amendments have been proposed in section 115BBE:
1. Unexplained cash/investments/assets etc. declared in return by the tax payer
Tax @ 60 % plus 25% surcharge on tax payable [total levy of 75% ]
2. Unexplained cash/investments/assets etc. not declared in return by the tax payer but detected by Tax Authority
In such case, addition penalty @10% will be levied under section 271AAC [ie. total levy will be 85%] .
3. Penalty in case of Search and Seizure cases
Any person holding black money which is found during a search shall be taxed @ 60% plus 25% surcharge on tax payable plus penalty @ 30% on income under section 271AAB, if the income is admitted, returned and the taxes are paid or 60% in any other case [ie. total levy will be 105% or 135% as the case may be].
**Cess @ 3% on amount of tax and surcharge shall be borne by the assessee.