Pradhan Mantri Garib Kalyan Yojana, 2016 comes into force w.e.f. the 17th day December, 2016 and a person may make declaration under this scheme the 31st day of March, 2017.
The salient features of the Scheme are as under:
(i) Declaration under the Scheme can be made by any person in respect of undisclosed income in the form of cash or deposits in an account with bank or post office or specified entity.
(ii) Tax @30% of the undisclosed income, surcharge @33% of tax and penalty @10% of such income is payable besides mandatory deposit of 25% of the undisclosed income in Pradhan Mantri Garib Kalyan Deposit Scheme, 2016. The deposits are interest free and have a lock-in period of four years.
(iii) The income declared under the Scheme shall not be included in the total income of the declarant under the Income-tax Act for any assessment year.
(iv) The declarations made under the Scheme shall not be admissible as evidence under any Act (eg. Central Excise Act, Wealth-tax Act, Companies Act etc.).
However, no immunity will be available under Criminal Acts mentioned in section 199-O of the Scheme.
The Scheme provides an opportunity to persons having undisclosed income in the form of cash or deposit in an account maintained with a specified entity (which includes banks, post office etc.) to declare such income and pay tax, surcharge and penalty totaling in all to 49.9 per cent of such declared income.
Non declaration of undisclosed cash or deposit in accounts under the Scheme will render such undisclosed income liable to tax, surcharge and cess totaling to 77.25% of such income, if declared in the return of income. In case the same is not shown in the return of income a further penalty @10% of tax shall also be levied followed by prosecution. It may be noted that the provisions for levy of penalty for misreporting of income @200% of tax payable shall continue to apply with respect to cases of misreporting of income.
Further, it is to be noted that on or after 31.12.2016 the payment towards tax, surcharge, penalty and deposit under the PMGKY cannot be made in old Bank Notes of Rupees 500 and Rupees 1000 denomination issued by the RBI.
Procedure for Declaration of income in the form of cash or deposit in an account.-
(1) A declaration of income in the form of cash or deposit in an account maintained with a specified entity (which includes banks, post office etc.) shall be made in Form-1.
(2) The declaration shall be furnished to the Principal Commissioner or the Commissioner, as the case may be, using any of the following:
· Electronically under digital signature or
· Electronic verification code using Aadhar Card, Mobile Number and Email or
· In print form.
(3) A revised declaration may be furnished on or before 31st day of March, 2016.
(4) The Principal Commissioner or the Commissioner, as the case may be, shall issue a certificate in Form-2 to the declarant within thirty days from the end of the month in which a valid declaration or revised valid declaration has been furnished.
(5) No deduction in respect of any expenditure or allowance or set-off of any loss shall be allowed against the income in respect of which a valid declaration is made under the Scheme.
(6) A declaration shall be void and shall be deemed never to have been made where a declaration has been made by misrepresentation or suppression of facts or without payment of tax and surcharge or penalty or without depositing the requisite amount in the PMGKY Deposit Scheme.
Procedures of Deposits under Pradhan Mantri Garib Kalyan Yojana, 2016
Eligibility — The deposit under this Scheme shall be made by any person who intends to declare undisclosed income under Pradhan Mantri Garib Kalyan Yojana, 2016 except in relation to –
(a) in relation to any person in respect of whom an order of detention has been made under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 subject to the conditions specified under the Scheme.
(b) in relation to prosecution for any offence punishable under Chapter IX or Chapter XVII of the Indian Penal Code, the Narcotic Drugs and Psychotropic Substances Act, 1985, the Unlawful Activities (Prevention) Act, 1967, the Prevention of Corruption Act, 1988, the Prohibition of Benami Property Transactions Act, 1988 and the Prevention of Money Laundering Act, 2002;
(c) to any person notified under section 3 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992;
(d) in relation to any undisclosed foreign income and asset which is chargeable to tax under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
Minimum amount to be deposited - The deposit under the scheme by a declarant shall not be less than twenty-five per cent of the undisclosed income in multiples of rupees one hundred in a single payment.
How to make application - An application for the deposit under this Scheme shall be made in Form II clearly indicating the amount, full name, Permanent Account Number (PAN application acknowledgement number, if person does not hold PAN), Bank Account details (for receiving redemption proceeds), and address of the declarant.
Issue of certificate - A certificate of holding the deposit shall be issued to declarant in Form I.
Nomination - A nomination may be done in Form III and the same can be cancelled or varied by giving notice in Form IV.
Transferability — The transferability shall be limited to nominee or to the legal heir of an individual holder, in the event of his death.
Interest and Tradability — A deposit shall not bear any interest and shall not be tradable.
Repayment.— The Bonds Ledger Account shall be repayable on the expiration of four years from the date of deposit and redemption before its maturity date shall not be allowed.
The author is member of the ICAI and can be contacted @ pbhch.d@gmail.com
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