Pradhan Mantri Garib Kalyan Yojana
The government on 28th November 2016, announced yet another income disclosure scheme, named as pradhan Mantri Garib Kalyan Yojana, giving an opportunity to money hoarders to pay taxes and disclose their unaccounted money. Once tax and penalties are paid the black money hoarders will have future immunity on the declared amount.
Declarations in this scheme can be made upto 30th December 2016.
Further, 25% of the amount declared under the scheme will be parked in a government fund for a period of four years @ 0% interest. This fund is meant to be used for improvement of irrigation, housing, toilets, infrastructure, primary education, primary health and livelihood creation. This would leave 25% of the amount in the hands of the black money holder.
For unaccounted cash not declared under the scheme, the taxes and penalties will include a flat income tax @ 60% and a surcharge @ 25% of the tax (15% of total amount), amounting to a total of 75%.
Further, the assessing officer would have the discretion of imposing a further 10% penalty, which could bring the combined taxes and penalties to 85%. This would leave 15% of the amount in the hands of the black money holder.
For unaccounted money that is seized by authorities in raids, the system of levying 30% income tax and penalty of 50% of tax (for under-reporting of income) or 200% of tax (for misreporting of income) will continue.
The amendment introduced by Jaitley in the Lok Sabha can be expected to be passed without hiccups, as the government has a majority in the Lower House. Also, it cannot be rejected or stalled in the Rajya Sabha, as it is a money bill. The Upper House, where the government is in a minority, can only review it.
