Post Raids, Black Money To Attract Over 137% In Tax, Penalty

Black money holders will have to bear taxes and penalties amounting to as high as 137 per cent if they do not admit to or fail to explain the source of undisclosed income after being raided, the income tax department today said. However, the total levy can touch 107.25 per cent if the undisclosed income is admitted during search operations and that income substantiated, the department said in a release, adding the tax dodgers can come clean by paying 50 per cent on bank deposits post demonetisation. If one fails to admit his unexplained income during the course of search and in case, taxes are not paid and he does not substantiate the manner in which income is earned, then the tax incidence will be 137.25 per cent, the tax department said in a release. However, if undisclosed income is admitted during search, taxes are paid and return is filed before the specified date declaring this income and assessee substantiates the manner in which income is earned, then the tax rate will be 107.25 per cent, the release added. "We are asking people to declare their undisclosed cash deposits in banks, post offices which have not been subject to tax earlier under Pradhan Mantri Garib Kalyan Yojna, 2016 (the scheme)," Principal Chief Commissioner of Income Tax (NWR) Rajendra Kumar said here today. This scheme which has come into effect on December 17 shall remain open for declarations up to March 31, 2017, he said. If the income is not admitted during search and the assessee is not able to substantiate the earning, it will attract 60 per cent tax, 60 per cent penalty, 15 per cent surcharge, 3 per cent education cess surcharge - amounting to 137.25 per cent. In case, the income is admitted during search and the assessee is able to substantiate the earning, it will attract 60 per cent tax, 30 per cent penalty, 15 per cent surcharge, 3 per cent education cess surcharge - totalling to 107.25 per cent. The Taxation Laws (Second Amendment) Act, 2016 has amended the penalty provisions in respect of search and seizure cases, the release said. The existing slab for penalty of 10 per cent, 20 per cent and 60 per cent of income levied under section 271AAB has been rationalized to 30 per cent of income, if the income is admitted and taxes are paid. Otherwise, a penalty at the rate of 60 per cent of income shall be levied, the department said in the release. Officials said the department will keep an eye on the deposits in excess of Rs 2.50 lakh made in saving accounts and Rs 12.50 lakh in current accounts post demonetisation. They said banks would provide complete information regarding such bank deposits to the income tax department by January 31. "Then from February onwards, the notices will be sent to people in whose accounts suspicious transactions are detected," officials said. Officials also said the department could also keep a tab on such transactions where "racketeering" could have taken place. "There can be the possibility that some might have deposited less than Rs 2.50 lakh in multiple accounts, for example Rs 2.25 lakh to hoodwink the tax authorities," the officials added. According to the release, not declaring undisclosed cash or deposits under the scheme but showing it as income in the tax return form would lead to a total levy of 77.25 per cent in taxes and penalty. In case, the disclosure is not made either using the scheme or in return, a further 10 per cent penalty on tax will be levied followed by prosecution totaling to 83.25 per cent, the release added. Department officials said one could avail PMGKY scheme by paying 50 per cent tax and setting aside the 25 per cent of the remaining undisclosed amount for 4 years. .(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

Post Raids, Black Money To Attract Over 137% In Tax, Penalty

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