Lok Sabha passes Income Tax amendment bill amid din

Amid din, Lok Sabha on Tuesday passed, within minutes and without any discussion, a bill that seeks to tax money deposited in banks post demonetisation, marking the first legislative business during the two-week-old Winter Session which has been paralysed by the opposition.

The Taxation Laws (2nd Amendment) Bill, 2016, was passed by the lower House after eight days of total washout. The Rajya Sabha, however, again failed to transact any business because of pandemonium of demonetisation. Even as Opposition members indulged in fierce slogan shouting, Finance Minister Arun Jaitley said the bill will give means to the Government of India to run schemes like Garib Kalyan Kosh. “I urge the House to accept the amendments,” he said while moving the bill for consideration and passing. He said the bill was brought after it came to the government’s notice that some people were trying to illegally exchange the demonetised Rs 1000 and Rs 500 currency notes.

Jaitley said as per the amendment proposed, those caught illegally converting money will have to cough up 60 peer cent tax plus penalties, which will come to 85 per cent.

Those who disclose black money to banks will have to pay 50 per cent tax, including surcharge and penalty. While they will get back 25 per cent immediately, the rest 25 per cent will be returned after 4 years.

Some amendments moved by opposition members were rejected as those required approval of the President which could not be obtained.

Two amendments by N K Premchandran (RSP) and B Mahtab (BJD) were allowed. While Premchandran refused to move the amendment as he was shouting slogans, Mahtab’s was negated by a voice vote.

Earlier, several opposition members said the bill could not be discussed before the debate on demonetisation as the measure was a follow up of the note ban decision.Speaker Sumitra Mahajan said since the bill is of urgent public importance, it has to be passed immediately. Though she wanted a debate, she said “it is impossible” because of the behaviour of the opposition members.

Congress leader in the Lok Sabha Mallikarjun Kharge and TMC’s Sudip Bandhopadhyay said the two -- Adjournment Motion on demonetisation and the Income Tax Amendment Bill can be discussed together as the issues were similar.

Saugat Roy (TMC) said since Jaitley on Monday introduced the Bill “surreptiously” and “stealthily” amid din, the opposition did not get a chance to oppose its introduction as per rules.

B Mahtab said discussion on demonetisation was also necessary along with a debate on the bill as it had serious repercussions on the Income Tax laws. He said a way should be found. 

The bill proposes to levy a total tax, penalty and surcharge of 50 per cent on the amount deposited post demonetisation while higher taxes and stiffer penalty of up to 85 per cent await those who don’t disclose but are caught. 

The proposed law also provides for black money declarants to mandatorily deposit 25 per cent of the disclosed amount in anti-poverty scheme without interest and a four-year lock-in period. Those who choose to declare their ill-gotten wealth stashed till now in banned Rs 500 and Rs 1000 notes under the Pradhan Mantri Grabi Kalyan Yojana 2016, will have to pay a tax at the rate of 30 per cent of the undisclosed income, the new bill proposes.

Additionally, a 10 per cent penalty will be levied on the undisclosed income and surcharge called PMGK Cess at the rate of 33 per cent of tax (33 per cent of 30 per cent). Further, the declarants have to deposit 25 per cent of the undisclosed income in a scheme to be notified by the government in consultation with the Reserve Bank of India (RBI).

The money from the scheme would be used for projects in irrigation, housing, toilets, infrastructure, primary education, primary health and livelihood so that there is justice and equality, said the Statement of Objects and Reasons of the Bill.

For those who continue to hold onto undisclosed cash and are caught, existing provisions of the Income Tax law will be amended to provide for a flat 60 per cent tax plus a surcharge of 25 per cent of tax (15 per cent), which will amount a levy of 75 per cent.

Vociferous protests by Opposition benches demanding the presence of Prime Minister Narendra Modi during the debate on demonetisation on Tuesday led to the stalling of pre-noon proceedings in the Rajya Sabha.