Income tax scheme for black money holders may be notified this week

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New Delhi: Government is likely to notify this week the scheme giving tax dodgers another chance to come clean by paying 50% of tax on junked currency deposited in banks post demonetisation.

The Pradhan Mantri Garib Kalyan Yojana (PMGKY) provides for 50% taxes and surcharge on declarations of unaccounted cash deposited in banks. Declarants also have to park a quarter of the total sum in a non-interest bearing deposit for four years.

The department of revenue will by the end of the week notify PMGKY 2016, which was a part of ‘The Taxation Laws (Second Amendment) Bill, 2016’ and was approved by the Lok Sabha on 29 November. “The notification will provide details as to how declarations are to be made (format) and the manner of paying taxes, whether in instalments or in full. It will also provide an end date to the PMGKY scheme,” an official said.

Also Read: The fungibility of black money

‘The Taxation Laws (Second Amendment) Bill, 2016’ was introduced in the Lok Sabha as a Money Bill which necessarily does not require assent of the Upper House of Parliament. Constitution provides that that the Rajya Sabha is required to return a Money Bill passed by Lok Sabha within a period of 14 days from the date of its receipt. The period of 14 days is computed from the date of receipt of the Bill in the Rajya Sabha Secretariat, which is 30 November in this case. “The 14 day period comes to an end on 14 December . After that it will be presented to the President for his assent and thereafter, will be notified this week,” the official added.

The notification is also likely to specify that the disclosures in PMGKY scheme will ensure that no questions will be asked about the source of fund and there would be immunity from Wealth Tax, civil laws and other taxation laws. But there is no immunity from the Foreign Exchange Management Act (FEMA), Prevention of Money Laundering Act (PMLA), Narcotics and foreign Black Money Act.

Also Read: Demonetisation: The money trail

In a major assault on black money, Prime Minister Narendra Modi had on 8 November announced demonetisation of Rs500 and Rs1,000 currency notes and asked holders to deposit such notes in banks. Since then. people have been queueing up before the banks to deposit junked currencies.

Since 10 November, Rs11.85 lakh crore in form of old Rs500 and Rs1,000 notes have returned into the banking system. It was estimated that the now defunct notes constituted 86%, or Rs14.5 lakh crore, in circulation