Arjuna (Fictional Character): Krishna, Government has taken a huge step for taking out black money from rich people by banning notes of Rs. 500 and Rs. 1000, after that they have brought a new scheme. What is that?
Krishna (Fictional Character): Arjuna, there are many rich people who have 500 and 1000 rupee notes on which they haven’t paid tax that’s why it is black money. This money cannot be deposited in banks. Because of this some people are searching alternative ways to prevent themselves while some are searching ways to convent black money into white money by using different sections of Income Tax Act. Even there are rumors that people are throwing money in rivers, dustbins etc. Rich people are getting more and more scared because of this. To prevent the situation Government has came up with a new scheme called “Pradhan Mantri Garib Kalyan Yojna”. This is another chance for rich people to convert their black money into white. The money which government will receive by this scheme will be used for poor people which will lead to justice and equality to all. Even though it is named as Garib Kalyan Yojna but actually the scheme is for rich people.
Arjuna (Fictional Character): Krishna , What are the main features of this Scheme?
Krishna (Fictional Character): Arjuna , Government has named this scheme as “Pradhan Mantri Garib Kalyan Yojna 2016”. The main features of the same are as follows-
Arjuna (Fictional Character): Krishna, what are the taxes & penalties levied under this scheme?
Krishna (Fictional Character): Arjuna, the person participating in this scheme has to pay 30% tax; a surcharge will be levied @33% on the tax amount which is named as “Pradhan Mantri Garib Kalyan Cess”. The person is also liable for a penalty @10% thus the total amount of taxes and penalty goes to 50% of the income declared and a minimum amount of 25% has to be keep deposit for the period of 4 years. No interest will be given on the money keep as deposit. Only after paying the above taxes and penalty the person’s declaration will be registered. For Example – the person is having 1Crore of undisclosed income and he discloses under this scheme than the person is liable to pay 30Lacks as tax amount , 9.9Lacks surcharge ,10 Lacks as penalty which comes to 49.9Lacks and 25Lacks as a fixed deposit for the period of 4 years. Only after that his declaration will be registered.
Arjuna (Fictional Character): Krishna, who all persons can participate in this scheme?
Krishna (Fictional Character): Arjuna, the following persons are not eligible to participate in this scheme-
Arjuna (Fictional Character): Krishna, if any person has undisclosed income and he does not declare his income under this scheme than what will happen?
Krishna (Fictional Character): Arjuna, according to section 68, 69(a), 69(b), 69(c), 69(d) if any person having undisclosed income and he pay tax than tax was levied @30%. But government has brought amendments in the Income tax provisions. If the person now declares his income not under this scheme than tax on such amount will be levied @60% and 25% surcharge on the tax amount will be levied i.e approximately 77.25% is to be paid and after that income tax return is to be filed. For example- If a person is having undisclosed income of 1crore and he does not opt for this scheme than he is liable to pay 60lacks as tax and 15lacks of surcharge approximately 75lacks. But fot the person against whom any search was conducted and who admits to disclose the undisclosed income than he will be liable to pay tax @60% of the undisclosed income, 15% of surcharge on the tax amount and 10% as penalty i.e approximately 83.25% .
Arjuna (Fictional Character): Krishna, what lesson we should learn?
Krishna (Fictional Character): Arjuna, Government has given last chance to disclose black money. Many people have deposited money in their relatives or other’s bank accounts they should consider the provisions of Income tax Act. Government had given chance through “Income Declaration Scheme” in which 45% of the income was taken by government and 55% of the income was kept by the assessee. Now under “Pradhan Mantri Garib Kalyan Yojna” the government will keep 50% of the income and 50% will be of assessee. But after this approximately 83.25% of the income will be of Government and only remaining will be of assessee. So rich people should take benefit of this scheme after considering the above points.