The government on Thursday said the demonetised Rs500 and Rs1,000 bank notes can be used to make payments towards tax, surcharge, penalty and deposit under the Pradhan Mantri Garib Kalyan Yojana (PMGKY), the window for which is available till 30 December, which is also the last date for acceptance of old cancelled notes by scheduled banks.
''The Central Government has decided that up to 30 December 2016, the payment towards tax, surcharge, penalty and deposit under the Pradhan Mantri Garib KalyanYojana (PMGKY), can be made in old bank notes of Rs500 and Rs1,000 denomination issued by the RBI,'' an official statement said.
The Taxation and Investment Regime for Pradhan Mantri Garib KalyanYojana (PMGKY), 2016 commenced on 17 December 2016 and is open for declarations up to 31 March 2017.
The payment of tax, surcharge and penalty under the scheme is to be made through challan ITNS- 287 and the deposits are to be made in the Pradhan Mantri Garib Kalyan Deposit Scheme 2016.
However, payments of tax and penalty under the PMGKY scheme after the 30 December deadline will have to be made in legal tender or cheques or drafts or in digital made only.
Under the PMGKY scheme total taxes (including surcharge and penalty of 50 per cent of the declaration in demonetised currency will have to be paid to the government. In addition, an amount equal to 25 per cent of the declaration will have to be deposited in non-interest bearing Pradhan Mantri Garib Kalyan Deposit Scheme, 2016, for four years.
This will still leave 25 per cent of the undisclosed income in the hands of the assessee for immediate use.
The declarations can be made in respect of undisclosed income in the form of cash or deposits in an account with bank or post office or specified entity.
This means that if a person has undisclosed income in bank accounts he can also avail of this scheme and use the demonetised currency to pay for tax and deposits by 30 December.
The scheme allows for deposit to be made in the form of cash or draft or cheque or by electronic transfer.
The payment of tax, surcharge and penalty under the Scheme is to be made through challan ITNS- 287 and the deposits are to be made in the Pradhan Mantri Garib Kalyan Deposit Scheme, 2016, a finance ministry statement said on Thursday.
Meanwhile, the Income tax Department on Thursday issued norms relating to receipt of cash payment exceeding Rs2,00,000 for sale of goods or service. The norms are being issued in the light of doubts raised if such transactions required to be aggregated for reporting.
The I-T Department said the norms of aggregation clearly indicating that the said transactions did not require aggregation and the reporting requirement under SFT for this purpose is on receipt of cash payment exceeding Rs2,00,000 for sale of goods or services per transaction.