Pay 50% income tax on undisclosed income and 85% if caught

The government on Monday offered a new window for tax dodgers to come clean, allowing them to declare hidden wealth by paying 50 per cent of the total amount – 30 per cent as income tax, 10 per cent as penalty and 33 per cent of the taxed amount – that is 10 per cent as Garib Kalyan Cess.

A 75 percent tax and 10 percent penalty in case Income Tax authorities detect undisclosed wealth deposited post demonetization of Rs 500 and Rs 1000 notes.

Finance Minister Arun Jaitley introduced a bill to amend the Income Tax law which also provides for black money declarants a mandatorily depositing of 25 per cent of the amount disclosed in anti-poverty scheme without interest and a four-year lock-in period.

On November 8, the Prime Minister Narendra Modi banned the old Rs 500 and Rs 1000 banknotes, setting in motion the world’s biggest currency recall exercise. The Bill, once voted into law, will allow the setting up of a ‘Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016′ (PMGKY).

The latest scheme comes barely two months after a similar window allowed tax evaders an opportunity declare their hidden assets. More than 64,000 people declared hidden assets worth Rs 65,250 crore availing the `Income Disclosure Scheme (IDS),’ a four month-long window that closed on September 30, allowing defaulters to come clean or face prosecution.

With the ban on Rs 500 and 1000 notes now more than two weeks old, the government has proposed new rules to tax black money that is being unearthed.

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