When this scheme was launched, there was a hue and cry from opposition that why is the government giving the black money hoarders a change to convert the black into white when it was announced at the time of erstwhile ‘Income Disclosure Scheme’ that no further chance would be given. I personally feel that Government was left with no option but to bring the PRADHAN MANTRI GARIB KALYAN YOGNA. The situation was such that people were trying various means and options of converting there black money into white money illegally. Various bank officials and managers were also arrested in this connection. Innocent people who had earned the money by hard way but never filed there income tax returns were the most hit, there money was not actually black but they cannot prove it now.
I personally advice that this YOGNA should be embraced with open hands, it is better to invest here than to go after some crook who only assures that there money will be converted into white (at least some part). Such money will never escape scrutiny from the Income Tax Department and the money paid to such crook is a dead loss.
When the old 500/- and 1000/- notes were banned, people lamented that they did not opt for INCOME DISCLOSURE SCHEME where tax rate was 45%, believe me that if you do not opt for PRADHAN MANTRI GARIB KALYAN YOGNA then you will lament that why did you miss this opportunity. I am saying so because, going by the track record of our honorable Prime Minister, he does what he says. He is saying that this is just a beginning , the picture is yet to come. Dear friends, he is going to come in a big way with THE BENAMI TRANSACTIONS (PROHIBITION) ACT .
Three steps are required to be taken in this PMGKYogna:
- Declaring about the deposits and cash
- Pay taxes and make the deposit:
The declarant has to pay 30% tax, 33% as surcharge tax, 10% penalty on overall income. This will come to almost around 50% of the total income. The person has to pay 25% of total declared amount to Pradhan Mantri Garib Kalyan Yogna, 2016. This deposit shall be blocked for a period of four (4) years and thereafter shall be paid without interest.
Suppose declared income is 100
Tax (30%) 30.00
Surcharge (33%) 9.90
Penalty (10%) 10.
- Declaration shall be made with payment and deposit proof
The last date for availing this YOGNA is 31st January, 2017 so hurry up.
The following persons are not eligible to opt for the PMGKY:
- Any person in respect of whom an order of detention has been made Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974
- Any person who is liable to punishment under Prevention of Corruption Act, 1988, Benami Property Transaction Act, 1988 or Prevention of Money-laundering Act ,2002
- The persons having undisclosed foreign income and asset which is chargeable to tax under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 1992
- Any person notified under Special Court Act, 1992
Government had brought certain amendments in the Income tax provisions so that tax on undisclosed income is 30% and with surcharge etc upto 50% but once the time is over the dreaded sections of Income Tax Act, 1961 will be unleased. They will make you dole out 60% tax and interest and penalty that will add up to a figure sufficient enough to your head a whirling experience.
Just have a look at some of the penalty provisions of the Income Tax Act:
|Section||Nature of default||Penalty leviable|
|158BFA(2)||Determination of undisclosed income of block period||Minimum : 100 per cent of tax leviable in respect of undisclosed income|
|Maximum : 300 per cent of tax leviable in respect of undisclosed income.|
|221(1)||Default in making payment of tax||Such amount as Assessing Officer may impose but not exceeding amount of tax in arrears|
|270A(1)||Under-reporting and misreporting of income||A sum equal to 50% of the amount of tax payable on under-reported income.
However, if under-reported income is in consequence of any misreporting thereof by any person, the penalty shall be equal to 200% of the amount of tax payable on under-reported income