Proposed Scheme of Declaration under Pradhan Mantri
Garib Kalyan Yojana 2016 of undisclosed income stashed in Rs. 500 &
Rs. 1000 currency notes -
After bold & surprising move of demonitisation
of all old
Rs. 500 and Rs. 1000 currency notes Government has proposed a total 50
% levy of tax, surcharge and penalty on the amount deposited after
demonetisation and disclosed.The proposed window to black money holders
gives them option to Declare under Pradhan Mantri Garib Kalyan Yojna
2016. The Scheme provides
- Tax
@ 30% plus 10 % cess (@33% cess (called as PMGK cess) of the amount of
tax) plus penalty @ 10%. Total will be around 50% of the income
declared.
- Additionally 25 % of the declared income is
mandatorily to be deposited in an anti poverty scheme with no interest
and four years lock in period. The scheme is to be notified by
government. The money from the Scheme is proposed tobe used for
projects
in irrigation, housing, toilets, infrastructure, primary education,
primary
health and livelihood so that there is justice and equality.
- So immediately 25% of the disclosed money will be
available as declared clear income.
- Additional 25% will be available as declared clear
income after four years.
In case of nondisclosure of black money
Those who continue to hold their undisclosed cash and are caught will
face tax @ 60% plus surcharge 15% (25% of the income Tax) which will be
a total levy of 75% of the undisclosed income. Additionally the
Assessing Officer may also charge penalty of 10%. A total of 85% tax & penalty may be faced in case of non disclosure.
TDS
Master View:
In our opinion on declaration under the proposed Pradhan Mantri Garib
Kalyan Yojna
2016 almost 60 % of the money declared will be available in hands with
in four years. The
break up will be; 25% immediately, 25% after four years and around 10%
in the form of interest which one will get on investing the immediately
received 25% clear income (which otherwise would have been
stashed in currency notes without any income theron).
