Pay 30% tax, 33% cess & 10% penalty to come clean, else brace for 85% penal charge Trump Alleges That ‘Millions of People’ Voted Illegally
New Delhi: The government is providing yet another opportunity for people with black money to come clean at a total cost of 50% and having a quarter of their unaccounted wealth locked up for four years, warning that they’ll be slapped with a penal 85% charge if they don’t take advantage of this and get caught subsequently. Income-tax law amendments have been moved to enable the window, which will involve the establishment of the Pradhan Mantri Garib Kalyan Yojana, 2016, and allowing declarants to keep the source of funds deposited in banks from November 10 a secret if they use the option. PM Narendra Modi had announced the demonetisation of .? 500 and .? 1,000 notes on November 8 as part of a campaign against black money, counterfeiting, corruption and terror financing. Banks started accepting deposits in old notes from November 10. “Tax department will not ask for the source of funds deposited in banks… if the entire income is declared and 50% taxes pa- id on it,” Revenue Secretary Hasmukh Adhia told reporters on Monday at a briefing. The 50% levy is broken up into 30% tax, a 33% surcharge or cess on that tax and a 10% penalty. The scheme, to be notified after the passage of the Bill in Parliament and Presidential assent, has features almost similar to the recent Income Disclosure Scheme that provided immunity from prosecution as also provided assurance to not reveal identity of depositors. Under the scheme, undisclosed income in the form of both cash and bank deposits can be declared. The move was prompted by a surge in deposits and a perceived ambiguity about applicable taxes. “Concerns have been raised that some existing provisions in the income-tax Act could possibly be used for concealing black money,” Finance Minister Arun Jaitley said in the statement of objects and reasons for the amendments. “It is, therefore, important that the government amends the Act to plug these loopholes as early as possible to prevent misuse.” The 33% surcharge will be called the Pradhan Mantri Garib Kalyan Cess while the 25% deposit will go into the Pradhan Mantri Garib Kalyan Yojana.
The idea is to get banks to educate Jan Dhan accountholders about insurance plans Pradhan Mantri Suraksha Bima Yojana and the Pradhan Mantri Jeevan Jyoti Bima Yojana, besides the Atal Pension Yojana, a pension scheme for the poor.
About 9.72 crore people have been enrolled under the Suraksha Bima Yojana and 3.06 crore under the Jeevan Jyoti Bima Yojana, according to finance ministry data. That’s against 26 crore Jan Dhan accounts with deposits of around .? 73,000 crore.
“Banks will not push these products but just educate such accountholders when they come to withdraw or deposit,” the official said, adding that banks can also hold financial literacy camps outside their branches. Banks will be free to engage with life insurance companies for implementing the scheme for accountholders.
The life insurance cover is available for an upfront premium payment of .? 330. The accidental insurance plan costs .? 12 annually and covers the holder against accidental death and disability. In both cases, the policy is eligible for a benefit of .? 2 lakh. The Pension Fund Regulatory and Development Authority (PFRDA) had written to state and district banking committees last month, saying that “banks are still not actively participating in sourcing Atal Pension Yojana accounts in a desirable manner”.
The Atal Pension Yojana, which has about 37 lakh subscribers, offers a guaranteed monthly pension of .? 1,000-5,000 depending on the contribution.
29TH NOVEMBER, 2016, THE ECONOMIC TIMES NEW DELHI
New Delhi: The government is providing yet another opportunity for people with black money to come clean at a total cost of 50% and having a quarter of their unaccounted wealth locked up for four years, warning that they’ll be slapped with a penal 85% charge if they don’t take advantage of this and get caught subsequently. Income-tax law amendments have been moved to enable the window, which will involve the establishment of the Pradhan Mantri Garib Kalyan Yojana, 2016, and allowing declarants to keep the source of funds deposited in banks from November 10 a secret if they use the option. PM Narendra Modi had announced the demonetisation of .? 500 and .? 1,000 notes on November 8 as part of a campaign against black money, counterfeiting, corruption and terror financing. Banks started accepting deposits in old notes from November 10. “Tax department will not ask for the source of funds deposited in banks… if the entire income is declared and 50% taxes pa- id on it,” Revenue Secretary Hasmukh Adhia told reporters on Monday at a briefing. The 50% levy is broken up into 30% tax, a 33% surcharge or cess on that tax and a 10% penalty. The scheme, to be notified after the passage of the Bill in Parliament and Presidential assent, has features almost similar to the recent Income Disclosure Scheme that provided immunity from prosecution as also provided assurance to not reveal identity of depositors. Under the scheme, undisclosed income in the form of both cash and bank deposits can be declared. The move was prompted by a surge in deposits and a perceived ambiguity about applicable taxes. “Concerns have been raised that some existing provisions in the income-tax Act could possibly be used for concealing black money,” Finance Minister Arun Jaitley said in the statement of objects and reasons for the amendments. “It is, therefore, important that the government amends the Act to plug these loopholes as early as possible to prevent misuse.” The 33% surcharge will be called the Pradhan Mantri Garib Kalyan Cess while the 25% deposit will go into the Pradhan Mantri Garib Kalyan Yojana.
The idea is to get banks to educate Jan Dhan accountholders about insurance plans Pradhan Mantri Suraksha Bima Yojana and the Pradhan Mantri Jeevan Jyoti Bima Yojana, besides the Atal Pension Yojana, a pension scheme for the poor.
About 9.72 crore people have been enrolled under the Suraksha Bima Yojana and 3.06 crore under the Jeevan Jyoti Bima Yojana, according to finance ministry data. That’s against 26 crore Jan Dhan accounts with deposits of around .? 73,000 crore.
“Banks will not push these products but just educate such accountholders when they come to withdraw or deposit,” the official said, adding that banks can also hold financial literacy camps outside their branches. Banks will be free to engage with life insurance companies for implementing the scheme for accountholders.
The life insurance cover is available for an upfront premium payment of .? 330. The accidental insurance plan costs .? 12 annually and covers the holder against accidental death and disability. In both cases, the policy is eligible for a benefit of .? 2 lakh. The Pension Fund Regulatory and Development Authority (PFRDA) had written to state and district banking committees last month, saying that “banks are still not actively participating in sourcing Atal Pension Yojana accounts in a desirable manner”.
The Atal Pension Yojana, which has about 37 lakh subscribers, offers a guaranteed monthly pension of .? 1,000-5,000 depending on the contribution.
29TH NOVEMBER, 2016, THE ECONOMIC TIMES NEW DELHI
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