News to remember – 28th November 2016
The Taxation Laws (SecondAmendment) Bill, 2016
The government of India, today, proposed a bill The Taxation Laws (Second Amendment) Bill, 2016 in Loksabha. Under this bill a scheme namely, ‘Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016’ (PMGKY) is also introduced.
a. The Taxation Laws (Second Amendment) Bill, 2016 has been introduced in the Parliament to amend the provisions of the Income-tax Act, 1961.
b. Concern is that some of the existing provisions of the Income-tax Act, 1961 can possibly be used for concealing black money. The Taxation Laws (Second Amendment) Bill, 2016 is proposed to amend the provisions of the Act to ensure that defaulting assessees are subjected to tax at a higher rate with stringent penalty provision.
c. No changes is proposed in general provision for penalty.
d. Under section 115BBE, provisions for taxation & penalty of unexplained credit, investment, cash and other assets will attract flat rate of tax @60% + surcharge @25% of tax (i.e. 15% of such income). So total tax will be 75% approx of total taxable income in proposed amendment.
e. Under Section 271AAC, if Assessing Officer determines income referred to in section 115BBE, in addition to tax (including surcharge) of 75%, a penalty @10% of tax payable is also proposed.
f. Under Section 271AAB, penalty for search seizure cases will be 30% of income, if admitted, returned and taxes are paid; 60% of income in any other case.
g. A new “Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016 (PMGKY)” will give tax evaders a chance to disclose their income in the form of cash & bank deposit. Under this scheme a declarant will have to pay 30% of undisclosed income as tax. Moreover, they also have to shell out 10% of undisclosed income as Penalty . In addition a surcharge namely “Pradhan Mantri Garib Kalyan Cess”, which would be 33% of tax (30%), is also proposed. Further the declaraint has to deposit 25% of declared income in interest free Deposit Scheme for four years under in the Pradhan Mantri Garib Kalyan Deposit Scheme, 2016.
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.
- Press Information Bureau, Government of India
- Demonetisation: Crackdown on black money continues; Modi government plans 75% tax + 10% penalty for detection of undisclosed income
Gain further Knowledge:
- If you want to know the calculation of the proposed “Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016 (PMGKY)” See the diagram made by Yatin Mota.
- To know the nitty-gritty of the proposed ‘Taxation Act 2016’ you may visit Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana 2016.
Check you facts: (Please don’t cheat)
- What is the full form of PMGKY?
a. Pradhan Mantri Gram Kalyan Yojna
b. Pradhan Mantri Garib Kalyan Yojna
c. Pradhan Mantri Garib Kisan Yojna
d. Pradhan Mantri Gram Kisan Yojana
- How much percentage of tax is proposed for “Pradhan Mantri Garib Kalyan Cess”?
- If I declare 1 crore rupees under Taxation and Investment Regime for PMGKY, 2016. How much I will deposit in the scheme?
a. 25 Lac
b. 16 Lac
c. 30 Lac
d. 33 Lac
- Which Act the proposed The Taxation Laws (Second Amendment) Bill, 2016 will amend?
a. Income Tax Act 1978
b. Income Tax Act 1961
c. Income Tax Act 1948
d. Income Tax Act 1981
- Under section 115BBE how much approx total tax one has to pay?
Write your answer in the comment section.
The answer is given in the article, so if you are unable to answer please go through the article again and try to answer the above questions.