On Friday, the government notified the new income disclosure scheme – the Pradhan Mantri Garib Kalyan Yojana (PMGKY), which comes into effect from Saturday. The new tax amnesty scheme, which will be open till the end of March 2017, is part of the government’s latest drive to curb black money.
Before the government demonetised Rs 500 and Rs 1,000 notes on 8 November, it had brought about an income disclosure window, which ended on 30 September and netted more than Rs 65,000 crore of undisclosed income.
While announcing the new scheme the government also released the rules for the same and asked people to provide information on black money via email. Here’s all that you want to know about what is possibly the last remaining window to declare black money, at least for now.
What really is PMGKY?
The PMGKY is an income disclosure scheme that allows people to declare their untaxed wealth till 31 March, and pay 50% tax on the total amount. This includes a 30% tax, a 33% cess on the tax levied and a 10% penalty on the undisclosed income. People who self-declare their wealth under this scheme, will not be quizzed on the source of income. The government has said that any information it gathers while receiving the declaration will not be used against the declarant for prosecution.
What happens to the untaxed money after you declare the same?
As mentioned, 50% of it will be taxed. A quarter of the declared amount will be parked for four years in a deposit, which will not earn any interest, while the rest can be used by the declarant.
What happens, if you deposit old Rs 500 and Rs 1,000 notes without declaring any untaxed wealth?
If you do not self-declare any black money, but tax authorities find any unexplained income, your wealth will be taxed at a rate of 60%, on top of which you will have to pay a 10% penalty on the undisclosed money and a 25% surcharge. Thus, the tax on non self-declaration will be significantly higher.
What happens if money is discovered during a seizure?
In such a case, in addition to the tax already payable, a penalty will be levied. If the person concerned admits to possessing undisclosed income, a 30% penalty on the undisclosed amount will be levied, which will go up to 60% if the person does not admit to having untaxed wealth.
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