Declare undisclosed income by March 31: Finance Ministry
The declarations made under the Scheme will not be admissible as evidence under any Act.
Ministry of Finance on Friday announced that the recently introduced Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016 (the Scheme) will commence on December 17, 2016 and will remain open for declarations up to March 31, 2017.
On November 29, the Lok Sabha had passed by a voice vote a bill to amend the income tax laws to facilitate levy of 60% tax on undisclosed income or investment or cash credit deposited in banks after the November 8 demonetisation.
Finance Minister Arun Jaitley, while moving the bill for consideration and passing, called it one of the steps by the Centre to curb black money.
In a notification released today, the Ministry said that the declaration made under the Scheme can be made by any person in respect of undisclosed income in the form of cash or deposits in an account with bank or post office or specified entity.
As per the Scheme, tax @30% of the undisclosed income, surcharge @33% of tax and penalty @10% of such income is payable besides mandatory deposit of 25% of the undisclosed income in Pradhan Mantri Garib Kalyan Deposit Scheme, 2016. The deposits are interest free and have a lock-in period of four years.
Moreover, the income declared under the Scheme will not be included in the total income of the declarant under the Income-tax Act for any assessment year, the Ministry notified.
The declarations made under the Scheme will not be admissible as evidence under any Act (eg. Central Excise Act, Wealth-tax Act, Companies Act etc.).
Non declaration of undisclosed cash or deposit in accounts under the Scheme will render such undisclosed income liable to tax, surcharge and cess totaling to 77.25% of such income, if declared in the return of income.
"In case the same is not shown in the return of income a further penalty @10% of tax shall also be levied followed by prosecution. It may be noted that the provisions for levy of penalty for misreporting of income @200% of tax payable under section 270A of the Income-tax Act have not been amended and shall continue to apply with respect to cases falling under the said section".
The Taxation Laws (Second Amendment) Act, 2016 has also amended the penalty provisions in respect of search and seizure cases. The existing slab for penalty of 10%, 20% & 60% of income levied under section 271AAB has been rationalised to 30% of income, if the income is admitted and taxes are paid. Otherwise a penalty @60% of income shall be levied.