Finance Minister Arun Jaitley, on Monday, tabled the Income Tax Amendment Bill in the Lok Sabha amid chaos and protests in a bid to corner the ruling BJP government on the issue of demonetisation. The IT Amendment Bill proposes proposes 30% tax on undisclosed income plus 10% penalty on the unaccounted wealth.
Zee Media Bureau
New Delhi: Finance Minister Arun Jaitley, on Monday, tabled the Income Tax Amendment Bill in the Lok Sabha amid chaos and protests in a bid to corner the government on the issue of demonetisation. The IT Amendment Bill proposes proposes 30% tax on undisclosed income plus 10% penalty on the unaccounted wealth.
The new amendments in the IT Act have been proposed to check measures that people are adopting to evade tax after government kick-started demonetisation of Rs 500 and Rs 1,000 notes.
Once the Bill is passed, there may not be a blanket reprieve for anyone depositing demonetised notes up to Rs 2.5 lakh.
Those depositing unaccounted cash in demonetised Rs 500 and Rs 1,000 notes may have to pay 30 percent tax on undisclosed income plus 10 percent penalty, as also a 33 percent surcharge.
The wealth holder will also have to specify the manner in which such income was derived.
The IT Amendments Bill also proposes that 25 percent of the undisclosed income post demonetisation has to be deposited in the Pradhan Mantri Garib Kalyan Deposit Scheme.
The deposit shall bear no interest and the amount deposited shall be allowed to be withdrawn only after four years from the date of deposit and shall also fulfil such other conditions as may be specified in the Pradhan Mantri Garib Kalyan Deposit.
The money from the scheme would be used for projects in irrigation, housing, toilets, infrastructure, primary education, primary health and livelihood so that there is justice and equality, said the Statement of Objects and Reasons of the Bill.
The Amendment also proposes a 75 percent tax and 10 percent penalty in case Income Tax authorities detect undisclosed wealth deposited post demonetisation.
Earlier reports said that the unaccounted wealth will bear 50% tax, lock in 25% amount for four years at zero interest, leaving only 25% for immediate use.
Changes to the income tax law were approved by Union Cabinet on Thursday.
The government had earlier said that individuals would be allowed to deposit demonetised notes up to Rs 2.5 lakh with income tax exemptions.
The authorities said that smaller deposits from members of the same family will not go unnoticed.
“We would be getting reports of all cash deposited during the period of November 10 to December 30 above a threshold of Rs 2.5 lakh in every account,” Revenue Secretary Hasmukh Adhia had said on November 10. “The department would do matching of this with income returns filed by the depositors". And suitable action will follow.
The government, after announcing demonetisation on Novemeber 8 had given a 50-day window beginning November 10 for either depositing the 500 and 1000 rupee notes in circulation or exchanging them for new currency.