Providing a window to black money holders, the government on Monday proposed to levy a total tax, penalty and surcharge of 50 per cent on the amount deposited post demonetisation while higher taxes and stiffer penalty of up to 85 per cent await those who don't disclose but are caught.
Those who choose to declare their ill-gotten wealth stashed till now in banned 500 and 1000 rupee notes under the Pradhan Mantri Garib Kalyan Yojana 2016, will have to pay a tax at the rate of 30 per cent of the undisclosed income.
Additionally, a 10 per cent penalty will be levied on the undisclosed income and surcharge called PMGK Cess at the rate of 33 per cent of tax (33 per cent of 30 per cent).
Further, the declarants have to deposit 25 per cent of the undisclosed income in a scheme to be notified by the government in consultation with the Reserve Bank of India (RBI).
The money from the scheme would be used for projects in irrigation, housing, toilets, infrastructure, primary education, primary health and livelihood so that there is justice and equality, said the Statement of Objects and Reasons of the Bill.
For those who continue to hold onto undisclosed cash and are caught, existing provisions of the Income Tax law will be amended to provide for a flat 60 per cent tax plus a surcharge of 25 per cent of tax (15 per cent), which will amount a levy of 75 per cent.
Besides, if the assessing officer decides he can charge a 10 per cent penalty in addition to the 75 per cent tax.
The current provisions of penalty on under-reporting of income at 50 per cent of the tax, and misreporting (200 per cent of tax) will remain and no changes are being made to them.
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WITHDRAWAL LIMITS EASED
* The Reserve Bank of India on Monday eased off withdrawl limits allowing people to withdraw currency beyond the permissible limits set earlier
* The circular to all banks reads: it has been decided to allow withdrawals of deposits made in current legal tender notes on or after November 29, 2016 beyond the current limits
