Demonetisation: New income disclosure scheme kicks off, March 31 deadline for black money holders
This income disclosure scheme, which is seen as the last attempt to by the government to curb the black money inflow in the system, rolls out from Saturday and end on March 31, 2016.
New Delhi: Offering the last chance to black money holders, the Centre, has unveiled a new scheme under which those with undisclosed income and assets located in India can come clean by paying a tax of around 50 percent.
This income disclosure scheme, which is seen as the last attempt to by the government to curb the black money inflow in the system, rolls out from Saturday and end on March 31, 2016. This is the second such income disclosure scheme gives tax evaders another chance to come clean. The first scheme, which began in June closed on 30 September.
However, unlike the earlier income declaration scheme, a tax evader will have to first pay the tax, put money in the deposit scheme and then make a declaration—either online or at an income tax office.
The government has tightened noose on black money holders and is planning to apply technology like data analytics and data mining to sift accounts of black money holders from the deposits made up to December 30.
The new scheme offers tax dodgers confidentially and immunity from prosecution.
Tax evaders can declare their unaccounted income till 31 March under the Pradhan Mantri Garib Kalyan Yojana.
The new IDS was notified along with other provisions of the Taxation Laws (Second Amendment) Act, 2016, on Friday.
Under the scheme, a declarant of undisclosed income needs to pay a tax of 30%, a penalty of 10% and a Pradhan Mantri Garib Kalyan Cess of 33% on the tax, all of which add up to around 50%.
In addition, the declarant will have to deposit 25% of the undisclosed income in the zero-interest Pradhan Mantri Garib Kalyan Deposit Scheme for four years. He needs to furnish his permanent account number (PAN) while making his declaration. Part of the proceeds of the scheme will be used for welfare schemes for the poor.
The government will use machines and data analytics to look for tax evaders. With the help of data mining, government will analyse voluminous data on cash deposits made in banks till 30 December. So, all those who are thinking of fudging deposits, will be identified. Focus is also on loan account prepayment in cash, cash deposited in dormant accounts, deposits in multiple accounts of the same person or family members.
Declarations made under the scheme will be kept confidential, and those coming clean will not be prosecuted under other legislations such as Central Excise Act, Wealth Tax Act, Companies Act. There will be no immunity from prosecution under criminal acts like the Prevention of Corruption Act and Prevention of Money Laundering Act, he added.
Common citizens can play their part in curbing black money in the economy by emailing information about tax evaders to firstname.lastname@example.org.