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Govt allows use of old notes for tax payment under income disclosure scheme

The government on Monday allowed use of junked Rs500 and Rs1,000 notes till 30 December for paying tax on disclosures made under its new income disclosure scheme. 
Video player from: NDTV (Privacy Policy)
 

 




























After the shock demonetisation of high value notes on 8 November, the government allowed the banned currency to be deposited in bank accounts. Those with unaccounted cash were offered a chance to come clean by paying 50% of it as tax, penalty and surcharge, while parking an additional 25% in a non-interest bearing deposit for four years.
“An opportunity has been given to the public to make the payments towards tax, penalty, cess/surcharge and deposit under the Pradhan Mantri Garib Kalyan Yojana (PMGKY) 2016 with the old bank notes of Rs500 and Rs1000 denomination up to 30 December 2016,” an official statement said.
Explaining the provision, an official said a holder of unaccounted cash in Rs500/1000 notes can now deposit half of it in any of the 29 scheduled banks that are entitled to accept income tax on behalf of the government. A quarter of the amount can be deposited in cash in the non-interest rate bearing PMGK Deposit Scheme 2016.
The remaining 25 per cent can then be deposited in individual bank account. After 30 December, tax as well as the deposit will have to be made through cheque or RTGS transfer.
The government has allowed holders of the scrapped notes to deposit them in their bank accounts till 30 December. No scheduled bank will accept them after that date. The official said the tax authorities are collating information about deposits made in banks post demonetisation and will send notices if any unaccounted income holder does not make disclosures under the amnesty scheme. 

Full coverage: War on black money

While some 3,000 tax notices have already been issued, more will be sent next month after the deposit deadline of 30 December closes. Those whose bank deposits do not match their income would be asked to explain and offered a chance to come clean under the amnesty scheme, which closes on 31 March.
Tax at the rate of 30% of the undisclosed income, surcharge of 33% of tax and penalty of 10% of such income is payable besides mandatory deposit of 25% of the undisclosed income in the PMGK Deposit Scheme.
Also read: Note ban breaks the backbone of Rs20 trillion trafficking industry
Income declared under the Scheme will not be included in the total income of the declarant under the Income Tax Act for any assessment year. Not declaring the black money under the scheme now but showing it as income in the tax return form would lead to a total levy of 77.25% in taxes and penalty.
In case the disclosure is not made either using the scheme or in return, a further 10 % penalty on tax will be levied followed by prosecution, he added. 

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