The Government of India on Monday announced that those people who honestly confess having black money and those who promptly deposit their black money in banks need only to pay 50% tax on their black money. No questions will be asked about the source of the black money and no legal action will be taken. On the contrary, if people who do not deposit their black money within the given deadline (December 30th, 2016) are caught, a heavy penalty (tax) of 85% will be imposed on their black money, they will be questioned about the source of their black money and they might also be imprisoned.
In the 50% of tax, collected on black money, from honest black money depositors, 25% or half of the amount collected, will be used for the government’s Anti-Poverty scheme and the other half will go to the Income Tax department. The amount collected for Anti-Poverty scheme will be refunded to the tax payers after four years. The 50% of tax collected on black money, from honest depositors includes 30% tax on the black money, 10% of the black money amount will be used for PMGKY Cess and 33% of the 30% tax paid on black money will be given as a surcharge amount to the PMGKY cess. The 85% tax collected on black money from dishonest black money hoarders includes 60% tax on black money, 25% of the 60% of tax amount (15% of the total black money amount) will be used for a government scheme, which the Government of India will announce shortly, after consulting with the RBI and the dishonest hoarders will have to pay an additional 10% of the total black money amount as a fine to the Income Tax department. The Government of India plans to use part of the tax amount collected on black money for its Pradhan Mantri Garib Kalyan Yojana scheme. The scheme plans to undertake projects on 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. Read more on Black Money
The Taxation Laws (Second Amendment) Bill, 2016, proposes to amend Section 115BBE of the Income Tax Act to provide for a punitive tax, surcharge and penalty on unexplained income, investment, cash and other assets. There is a clear 30% difference in the tax amount collected on black money, in the cases of dishonest black money hoarders and honest black money depositors. “The disclosures in PMGKY scheme will ensure that no questions will be asked about the source of fund. It would ensure immunity from wealth tax, civil laws and other taxation laws. But there is no immunity from FEMA, PMLA, Narcotics and black money act”, Revenue secretary, Hasmukh Adhia. “PMGKY will come in as a new Chapter 9 in the Finance Act of 2016”, he added.
The announcement made by the government on Monday is intended to encourage people to deposit black money and discourage dishonest black money hoarders. The Government of India also plans to retrieve black property with people through its EPPB scheme, which will be implemented shortly. People, who think that they can outsmart the government by converting their black money into black property, will be caught by this scheme. My sincere advice to the people who have black money is: “Do not try to act smart and cheat the government. You will be caught in the next scheme if not this one. If caught, you could also be imprisoned. If not for yourself, at least for the sake of your family, be honest and deposit your black money, to save yourself from heavy fines and embarrassment in front of the public”. Read more on Startup News
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