Income Tax bill: 5 changes that will hit black money hoarders
- Finance Minister, Arun Jaitley, introduced the Income Tax amendment bill in Lok Sabha.
- This bill proposes a scheme termed as, Pradhan Mantri Garib Kalyan Yojana (PMGKY).
- The proposed amendment does not change the existing penalty provisions for under-reported or misreported income.
Post demonetisation, the government has decided to give another chance to the black money holders by introducing a couple of important changes in the Income Tax act of 1961.
With this objective, the Finance Minister, Arun Jaitley, introduced an Income Tax amendment bill in the Lok Sabha and following are the important points everyone should know:
1. This bill proposes new income disclosure scheme under the name of the Pradhan Mantri Garib Kalyan Yojana 2016.
2. Under this scheme, declarants of unaccounted income will have to pay 30% tax on the income disclosed plus 33% surcharge on the tax paid plus 10% of the income disclosed as penalty taking the total tax incidence to about 50%.
3. Those who are caught with undisclosed black money, as per the new amendment flat 60% tax and a surcharge of 25% of tax (which is 15%) and a total of 75% will be imposed. Apart from this, the assessing officer can also levy another 10% penalty on the 75% tax making it 85% penalty.
4. Income Tax amendment bill also makes it mandatory for the black money declarants to deposit 25% of the disclosed amount in the anti-poverty scheme (notified by the government after consulting RBI) without any interest and for a four-year lock-in period.
5. The proposed amendment does not change the existing penalty provisions under which 50% tax is levied on under-reporting of income and 200% tax on misreporting of income.
After introducing the amendment bill, Arun Jaitley, said, "There have been representations and suggestions from experts that instead of allowing people to find illegal ways of converting their black money into black again, the government should give them an opportunity to pay taxes with heavy penalty and allow them to come clean".