Sandeep Ahuja & Co.

Established in the year 1986, we are a leading chartered accountancy firm based in Delhi & NCR rendering comprehensive professional services which include statutory audit, internal audit, direct tax, transfer pricing, GST, bank audit, propriety audit, cost accounting, internal financial controls and risk advisory.

Monday, December 19, 2016

Pradhan Mantri Garib Kalyan Yojana Rules, 2016 And Investment Scheme,2016 – A Tax Amensity Or Investment

After the demonetization there is again a chance of declaration of Unaccounted money has been given to the Tax evaders. The ‘Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016' (PMGKY) is introduced. Such scheme will be effective from 17.12.2016 to 31.03.2017. The Department of Economic Affairs has issued a Notification No.116 dated 16th December, 2016 for giving Rules for such scheme and a separate notification has been issued for Pradhan Mantri Garib Kalyan Deposit Scheme, 2016

The salient features of the scheme are as under:

(i) 30% tax and 10% of penalty on such undisclosed income and 33% surcharge on tax on undisclosed income where as effective tax on such undisclosed income comes to 49.9% say 50% of the amount so declared.
(ii) 25% of such declared undisclosed income post demonetisation has to be deposited in the Pradhan Mantri Garib Kalyan Deposit Scheme for a lock in period of 4 years and such deposit will be interest free i.e no interest will be paid.
 Example :
Declared unaccounted Cash income
Rs.10,00,000
30% Tax on declared undisclosed cash income
 Rs.  3,00,000
10% Penalty
Rs.  1,00,000
33% Surcharge on Tax
 Rs.    99,000
25% of Such undisclosed declared income                ( to be deposited in PMGKY,2016 for 4 years)       
Rs.2,50,000
Available with the assessee/ declarant
Rs. 2,51,000                       

 Update on 22.12.16 by the Govt
 Payments towards Tax, Penalty, Surcharge and Deposit under PMGKY 2016
As per Notification on 22.12.16 - PMGKY, 2016  ( TheTaxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana,2016) has commenced on 17th December, 2016 and is open for declarations up to 31st March, 2017.
·       Upto 30.12.16 such payments can be made in Old Demonetised Currency notes of Rs.500/- and Rs.1000/-
·       After 30.12.16 upto 31.03.17 the payments of tax and penalty can be made in new currency only.
·        The payment of tax, surcharge and penalty under PMGKY is to be made through challan No. 287

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