How will PM’s black money scheme work after Dec 30?
Will Prime Minister Narendra Modi’s black money scheme be valid after December 30? The question takes on importance because old Rs 1,000 and Rs 500 notes would no longer be allowed to be deposited in banks after that date.
The Pradhan Mantri Garib Kalyan Deposit Scheme 2016 (PMGKY) is open till March 31, 2017 or for the the rest of the current financial year.
But the tax, penalty, cess, surcharge and deposit under the scheme can only be paid with demonetised notes of Rs 1,000 and Rs 500 till December 30, according to the details of the scheme advertised by the Income Tax Department.
So what happens when a person wants to declare undisclosed income on or after December 31? The department has left this question hanging.
Under the scheme, a person disclosing income would have to pay total tax, surcharge and penalty amounting to 49.90 per cent of the undisclosed income. Additionally, 25 per cent of the undisclosed income would have to be put in PMGK Deposit Scheme 2016 for four years without interest.
Since, obviously, the black money sought to be unearthed would be in old currency notes, how will a person declaring such income pay the penalty or deposit the 25 per cent amount on December 31 and up to March 31, 2017?
Is the government planning to extend the date of depositing old currencies for those declaring undisclosed income?
If the government does allow black money hoarders to deposit old notes after the December 30 deadline, it would be giving them preference over honest taxpayers who have to deposit all their old currency notes in their bank accounts by then.
A more cumbersome procedure of seeking special permission from the RBI kicks in after that deadline for anyone who wants to deposit demonetised notes.