PM's Garib Kalyan tax scheme for black money holders to be notified soon

The government is expected to come out with its latest scheme giving tax dodgers one more chance to come clean by paying 50 per cent tax and a surcharge thereon on demonetised currency deposited in banks since 8 November this year.

The Department of Revenue will by the end of the week notify the Pradhan Mantri Garib Kalyan Yojana (PMGKY) 2016, which was a part of 'The Taxation Laws (Second Amendment) Bill, 2016' and was approved by the Lok Sabha on 29 November.

Under the Pradhan Mantri Garib Kalyan Yojana (PMGKY), declarants will have to pay 50 per cent tax and a surcharge on their unaccounted cash deposited in banks. They will also have to park a quarter of the total sum in a non-interest bearing deposit for four years.

"The notification will provide details as to how declarations are to be made (format) and the manner of paying taxes, whether in installments or in full. It will also provide an end date to the PMGKY scheme," an official said.

The Taxation Laws Bill 2016 was introduced in the Lok Sabha as money bill, which means it does not necessarily requires the assent of the Upper House of Parliament.

Constitution obliges Rajya Sabha to return a money bill passed by the Lok Sabha within a period of 14 days from the date of its receipt. Rajya Sabha secretariat received the bill on 30 November and the bill is due to be returned by 14 November and the bill can be made a law any time after Wednesday, 14 December.

"The 14 day period comes to an end on December 14. After that it will be presented to the President for his assent and thereafter, will be notified this week," the official added.

The black money holder will not be asked any questions on the source of income and there will not be any wealth tax obligation. However, it does not guarantee immunity from FEMA, PMLA, Narcotics and foreign Black Money Act.

Banks in the country have received a total of Rs11,85,000 crore in old demonitised currencies of Rs500 and Rs1,000 denominations in the form of deposits since 10 November.

It was estimated that the now defunct notes constituted 86 per cent, or Rs14.5 lakh crore, in circulation.

Ever since the 8 November announcement by Prime Minister Narendra Modi on the scrapping of Rs500 and Rs1,000 currency notes, holders of such notes have been depositing these in banks across the country.