New Delhi: After banning Rs 500/1000 notes, the Centre has now proposed new rules to tax black money that are being recovered.
As a step taken in the same direction, Union Finance Minister Arun Jaitley introduced the Taxation Laws (Second Amendment) Bill, 2016 (‘the Bill’) to amend the provisions of the Act to ensure that defaulting assessees are subjected to tax at a higher rate and stringent penalty provision.
According to the bill, the Government should give the tax defaulters an opportunity to pay taxes with heavy penalty and allow them to come clean.
In this backdrop, an alternative Scheme namely, ‘Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016’ (PMGKY) has been proposed in the Bill.
The declarant under this regime shall be required to pay tax @ 30% of the undisclosed income, and penalty @10% of the undisclosed income. Further, a surcharge to be called ‘Pradhan Mantri Garib Kalyan Cess’ @33% of tax is also proposed to be levied, read a government statement.
In addition to tax, surcharge and penalty (totaling to approximately 50%), the declarants shall have to deposit 25% of undisclosed income in a Deposit Scheme to be notified by the RBI under the ‘Pradhan Mantri Garib Kalyan Deposit Scheme, 2016’, read the statement.
This amount is proposed to be utilised for the schemes of irrigation, housing, toilets, infrastructure, primary education, primary health, livelihood, etc., so that there is justice and equality.
The Centre on November 8 announced to ban Rs500 and Rs1000 currency notes.