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Friday, December 16, 2016

Last chance to black money hoarders by government

The government have given last to the black money hoarders and asked them to come clean by paying 50% tax on bank deposits of huge currency deposit after demonetisation by March 2017, announced on Friday.


The Revenue Secretary Hasmukh Adhia said, the declarations under new black money disclosure scheme will be kept confidential and the information won't be used for prosecution.

He also said, if you are not declaring the black money under the scheme now but you are showing the money as income in the tax return form would lead to a total levy of 77.25 per cent in taxes and penalty, he informed.

The government have also created an email id for the people to give information about black money hoarders to the tax authorities, if you have information on black money.

The people can directly contact the dept with info about possible conversion of black money at the below mentioned email address: blackmoneyinfo@incometax.gov.in


The key provisions of proposed new disclosure scheme is mentioned below:

1. General provision for penalty :

EXISTING PROVISIONS :
PENALTY (Section 270A)
Under-reporting - @50% of tax
Misreporting - @200% of tax
(Under-reporting/ Misreporting income is normally difference between returned income and assessed income)

PROPOSED PROVISION : No changes propose


2. Provisions for taxation & penalty of unexplained credit, investment, cash and other assets :


EXISTING PROVISIONS :
TAX (Section 115BBE)
Flat rate of tax @30% + surcharge + cess
(No expense, deductions, set-off is allowed)

PROPOSED PROVISION :
TAX (Section 115BBE)
Flat rate of tax @60% + surcharge @25% of tax (i.e. 15% of such income). So total incidence of tax is 75% approx.
(No expense, deductions, set-off is allowed)
PENALTY (Section 271AAC)
If Assessing Officer determines income referred to in section 115BBE, penalty @10% of tax payable in addition to tax (including surcharge) of 75%.


3. Penalty for search seizure cases :


EXISTING PROVISIONS :
Penalty (271AAB)
(i) 10% of income, if admitted, returned and taxes are paid
(ii) 20% of income, if not admitted but returned and taxes are paid
(iii) 60% of income in any other case

PROPOSED PROVISION :
Penalty (271AAB)
(i) 30% of income, if admitted, returned and taxes are paid
(ii) 60% of income in any other


4. Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016 (PMGKY) :


EXISTING PROVISIONS :
New Taxation and Investment Regime

PROPOSED PROVISION :
Undisclosed income in the form of cash & bank deposit can be declared:
(A) Tax, Surcharge, Penalty payable
Tax @30% of income declared
Surcharge @33% of tax
Penalty @10% of income declared
Total @50% of income (approx.)

(B) Deposit
25% of declared income to be deposited in interest
free Deposit Scheme for four years.

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