With the introduction of an Income Tax Amendment bill in Parliament today, the government has proposed a new income disclosure scheme under the name of the Pradhan Mantri Garib Kalyan Yojana 2016 and simultaneously proposed plugging certain loopholes in the Income Tax Act which could have been exploited by black money holders.The government has offered the carrot - the least tax option of the Garib Kalyan Yojana - and shown the stick and closed the loopholes: the hiked tax and penalties under Sections 115BBE and Section 271AAC and Section 271AAB.
If unaccounted income is declared under the Garib Kalyan Yojana, then the concerned person pays 30% tax on the income so disclosed plus 33% surcharge on the tax paid plus 10% of the income disclosed as penalty taking the total tax incidence to about 50%. Additionally, 25% of the disclosed income will have to be compulsorily placed in interest-free deposit scheme for four years. Refer table below.
Further, the income tax amendment bill also proposes to plug certain loopholes in the IT Act which may have been exploited by black money holders. As per tax experts, those depositing unexplained cash in their bank accounts post demonetisation could have tried to pass off that as income of the current financial year i.e.FY2016-17 and pay tax at the normal applicable slab rate which would be 30% in most cases plus the applicable surcharge (on income over Rs 1 crore) and 3% cess.
However, this bill proposes to amend Section 115BBE to plug this loophole, says Sonu Iyer, Tax Partner and People Advisory Services Leader, EY. As per the proposed amendment, with effect from 1.4.2016 in case of unexplained cash/assets/investments etc a 60% tax plus 25% surcharge (of the tax payable) will be levied - totalling to 75% tax approx.Additionally, 10% of this tax would also be leviable as penalty under section 271AAC if undisclosed income is not offered in return by taxpayer and detected by Tax authority subsequently.
Tax and penalty Provisions for search and seizure have also been made stricter by amending Section 271AAB. In case, unexplained assets/cash is found with you during a search and seizure raid then apart from the tax and surcharge under the amended Section 115BBE, penalty under section 271AAB will also be levied.This means that in case a person holding black money does not declare it on his/her own and instead the unaccounted money is found during a raid then a penalty of 30% of income will be levied if the concerned person admits the tax evasion at the time of the raid and in any other case (if he does not admit at that time) the penalty would be 60% of the unaccounted income, says Iyer.
You can file your ITR with ease via All India ITR.
Source : https://goo.gl/wEuKUJ
Also Read : Income Tax Act Amendments Upset Calculations
Further, the income tax amendment bill also proposes to plug certain loopholes in the IT Act which may have been exploited by black money holders. As per tax experts, those depositing unexplained cash in their bank accounts post demonetisation could have tried to pass off that as income of the current financial year i.e.FY2016-17 and pay tax at the normal applicable slab rate which would be 30% in most cases plus the applicable surcharge (on income over Rs 1 crore) and 3% cess.
However, this bill proposes to amend Section 115BBE to plug this loophole, says Sonu Iyer, Tax Partner and People Advisory Services Leader, EY. As per the proposed amendment, with effect from 1.4.2016 in case of unexplained cash/assets/investments etc a 60% tax plus 25% surcharge (of the tax payable) will be levied - totalling to 75% tax approx.Additionally, 10% of this tax would also be leviable as penalty under section 271AAC if undisclosed income is not offered in return by taxpayer and detected by Tax authority subsequently.
Tax and penalty Provisions for search and seizure have also been made stricter by amending Section 271AAB. In case, unexplained assets/cash is found with you during a search and seizure raid then apart from the tax and surcharge under the amended Section 115BBE, penalty under section 271AAB will also be levied.This means that in case a person holding black money does not declare it on his/her own and instead the unaccounted money is found during a raid then a penalty of 30% of income will be levied if the concerned person admits the tax evasion at the time of the raid and in any other case (if he does not admit at that time) the penalty would be 60% of the unaccounted income, says Iyer.
You can file your ITR with ease via All India ITR.
Source : https://goo.gl/wEuKUJ
Also Read : Income Tax Act Amendments Upset Calculations
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