Offering one last chance to black money holders, the Indian government on Friday said they have time until March-end to come clean 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 starts from Saturday, Revenue Secretary Hasmukh Adhia said non disclosure of deposits made in banks after the Rs 500 and Rs 1000 notes were scrapped 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.
“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 years, 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.
Also, as the disclosures will be kept confidential, the holder of unaccounted cash need not disclose it in Income Tax Returns forms.
After the demonetisation announcement on November 8, the government allowed the scrapped 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.
The government has also set up a special cell and created an email address (blackmoneyinfo@incometax.gov.in) to get information about black money hoarders, where anybody can provide relevant information.