Demonetisation: Declare, pay 50 per cent; hide, pay 85 per cent

New Delhi: Providing yet another opportunity to black money holders to legalise their wealth, the Union government has proposed to tax 50 per cent unaccounted demonetised cash that is disclosed voluntarily till December 30, after which a steep tax and penalty, up to 85 per cent, will be levied on undisclosed wealth that is discovered by authorities.

The Taxation Laws (Second Amendment) Bill, 2016, introduced on Monday in the Lok Sabha by finance minister Arun Jaitley, nearly three weeks after Prime Minister Narendra Modi banned high denomination currency notes, also provides for immunity from being questioned on the source of funds.

It amends the Income-Tax Act to also provide for black money declarants having to mandatorily park 25 per cent of that wealth in zero-interest and four-year-no-withdrawal scheme.

Introduced amid Opposition uproar over hardships caused by demonetisation, the Bill proposes a Pradhan Mantri Garib Kalyan Yojana 2016 wherein the unaccounted, now banned Rs 500 and Rs 1,000 rupee notes, deposited in banks between November 10 and December 30, will be taxed at 30 per cent plus a 10 per cent penalty. A 33 per cent surcharge on the tax will take the total levy to 50 per cent. Revenue secretary Hasmukh Adhia told the media later that “the disclosures in PMGKY scheme will ensure that no questions will be asked about the source of fund.