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New income disclosure scheme (Proposed)

Rahul Yadav
Rahul Yadav

Taxation Laws (Second Amendment) Bill, 2016 introduced in Lok Sabha; A scheme namely, Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016 (PMGKY) has been passed in the Lok Sabha and is in consideration before Rajya Sabha. The insights of the proposed scheme and amendments are discussed in this document.

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TAXATIONAND INVESTMENTREGIME FORPRADHANMANTRI GARIBKALYAN YOJANA,2016 (PROPOSED) NEW INCOME DISCLOSURE SCHEME BY RAHUL YADAV
THEKEY ELEMENTS THE SCHEME - INTRO RATES & TERMS OTHER AMENDMENTS PROPOSED 01 02 03
01 The scheme is introduced through The Taxation Laws (Second Amendment) Bill, 2016, which is passed in the Lok Sabha and is under consideration with Rajya Sabha. The scheme is proposed to give tax evaders last chance and to bring more black money into the records. THENEW SCHEME INTRODUCTION
WHATIS INTHE SCHEME? Under this scheme one can disclose his income which had not been offered to tax till date, it includes cash as well as bank deposits. The scheme is similar to the IDS 2016, but the tax rates are high and its terms are different.
02 The tax rate shall be 30% on the disclosed income plus 33% Pradhan Mantri Garib Kalyan cess plus 10% penalty on the income disclosed in the scheme. This sums up to 50% of income disclosed. RATES&TERMS RATES TERMS The person disclosing the income shall have to put 25% of the income disclosed into the Pradhan Mantri Garib Kalyan Scheme 2016 for four years and this will not carry any interest.
50% Of the disclosed income shall be paid to Income Tax Department. Of the disclosed income shall be free to use immediately . 25% 25% Of the disclosed income shall be deposited in the aforesaid scheme for 4 years.
03 OTHERAMENDMENTS PROPOSED To encourage people to disclose their income, few of the other amendment are also proposed. In case of identification of any undisclosed income by the tax department can now attract higher tax rates, penalties and additional cess.
PROVISIONSTOBE AMENDED OFFENCE EXISTING PROVISIONS PROPOSED PROVISIONS unexplained credit, investment,cash andotherassets TAX(Section115BBE) Flatrateoftax@30%+surcharge+ cess (Noexpense,deductions,set足offis allowed) TAX(Section115BBE) Flatrateoftax@60%+surcharge@25% oftax(i.e.15%ofsuchincome).Sototal incidenceoftaxis75%approx. (Noexpense,deductions,set足offisallowed) PENALTY(Section271AAC) IfAssessingOfficerdeterminesincome referredtoinsection115BBE,penalty @10%oftaxpayableinadditiontotax (includingsurcharge)of75%. Penalty(271AAB) (i)30%ofincome,ifadmitted, returnedandtaxesarepaid (ii)60%ofincomeinanyother case Penalty(271AAB) (i)10%ofincome,ifadmitted,returned andtaxesarepaid (ii)20%ofincome,ifnotadmittedbut returnedandtaxesarepaid (iii)60%ofincomeinanyothercase Undisclosed incomefoundin searchseizure cases
THANKS ALOTBY RAHUL YADAV

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New income disclosure scheme (Proposed)

  • 2. THEKEY ELEMENTS THE SCHEME - INTRO RATES & TERMS OTHER AMENDMENTS PROPOSED 01 02 03
  • 3. 01 The scheme is introduced through The Taxation Laws (Second Amendment) Bill, 2016, which is passed in the Lok Sabha and is under consideration with Rajya Sabha. The scheme is proposed to give tax evaders last chance and to bring more black money into the records. THENEW SCHEME INTRODUCTION
  • 4. WHATIS INTHE SCHEME? Under this scheme one can disclose his income which had not been offered to tax till date, it includes cash as well as bank deposits. The scheme is similar to the IDS 2016, but the tax rates are high and its terms are different.
  • 5. 02 The tax rate shall be 30% on the disclosed income plus 33% Pradhan Mantri Garib Kalyan cess plus 10% penalty on the income disclosed in the scheme. This sums up to 50% of income disclosed. RATES&TERMS RATES TERMS The person disclosing the income shall have to put 25% of the income disclosed into the Pradhan Mantri Garib Kalyan Scheme 2016 for four years and this will not carry any interest.
  • 6. 50% Of the disclosed income shall be paid to Income Tax Department. Of the disclosed income shall be free to use immediately . 25% 25% Of the disclosed income shall be deposited in the aforesaid scheme for 4 years.
  • 7. 03 OTHERAMENDMENTS PROPOSED To encourage people to disclose their income, few of the other amendment are also proposed. In case of identification of any undisclosed income by the tax department can now attract higher tax rates, penalties and additional cess.
  • 8. PROVISIONSTOBE AMENDED OFFENCE EXISTING PROVISIONS PROPOSED PROVISIONS unexplained credit, investment,cash andotherassets TAX(Section115BBE) Flatrateoftax@30%+surcharge+ cess (Noexpense,deductions,set足offis allowed) TAX(Section115BBE) Flatrateoftax@60%+surcharge@25% oftax(i.e.15%ofsuchincome).Sototal incidenceoftaxis75%approx. (Noexpense,deductions,set足offisallowed) PENALTY(Section271AAC) IfAssessingOfficerdeterminesincome referredtoinsection115BBE,penalty @10%oftaxpayableinadditiontotax (includingsurcharge)of75%. Penalty(271AAB) (i)30%ofincome,ifadmitted, returnedandtaxesarepaid (ii)60%ofincomeinanyother case Penalty(271AAB) (i)10%ofincome,ifadmitted,returned andtaxesarepaid (ii)20%ofincome,ifnotadmittedbut returnedandtaxesarepaid (iii)60%ofincomeinanyothercase Undisclosed incomefoundin searchseizure cases