Government gives another chance to tax defaulters

Monday, November 28, 2016
New Delhi

The Centre on Monday introduced a Bill in Lok Sabha that gives another chance to tax defaulters to come clean by paying tax and penalties.

The amendment to the Income Tax Act is a proposal to impose 50 per cent tax on undeclared income that is voluntarily disclosed till December 30 following which 82.5 per cent could be levied on undeclared income detected by authorities. It is intended to supplement the demonetization move said Finance Ministry in a statement. The proceeds made a part of the Padhan Mantri Garib Kalyan Yojana – will be used to fund schemes for providing irrigation, housing, toilets, infrastructure, primary education, health and livelihood.

Revenue Secretary Hasmukh Adhia said no questions would be asked about the source of funds for disclosures under the scheme. It would ensure immunity from wealth tax, civil laws and other taxation laws, he said.

Salient features::

  • No changes proposed to current general provision for penalty on under-reporting of income @50 per cent of tax, and misreporting @200 per cent tax.
  • Till December 30, declarant to pay tax @30 per cent and penalty @10 per cent of undisclosed income and surcharge @33 per cent of tax totaling to 50 per cent of such income.
  • 75 per cent of tax and possible penalty of 10 per cent of tax payable to be levied on undisclosed income detected after December 30. Besides, the declarant must deposit 25 per cent of such income in interest free scheme for 4 years.
  • Bill proposes total incidence of tax at 75 per cent up from 30 per cent on unexplained credit, cash and other assets.
  • In seizure cases, Bill levies a penalty at 30 per cent of income, if admitted, a return filed and taxes paid and 60 per cent of income in other cases.

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