New Delhi: The income tax department will not ask for the source of funds deposited in banks from 10 November—post demonetisation of high value notes, if the entire income is declared and 50% taxes paid on it, revenue secretary Hasmukh Adhia said on Monday.
The disclosures will enjoy immunity from wealth tax, civil and other taxation laws but there will be no immunity from Foreign Exchange Management Act (FEMA), Prevention of Money Laundering Act (PMLA), Narcotics and black money law, he said.
Nearly three weeks after Prime Minister Narendra Modi announced junking high denomination currency notes, finance minister Arun Jaitley has introduced a bill to amend the Income Tax law to provide for a 30% tax and a 33% surcharge on such tax, plus a penalty of 10% for black money that is deposited in banks and declared.
In case the undisclosed income is detected later, total tax and penalty of up to 85% can be levied.
“The deterrent provisions were necessary so that people have the fear of hoarding black money,” Adhia said.
The disclosures made in the Pradhan Mantri Garib Kalyan Yojana (PMGKY), that attracts 50% tax, “will ensure that no questions will be asked about the source of fund”, he said.
Deposits which have already been made from 10 November will be covered under PMGKY. “We will notify the last date for income declaration after the bill is passed but it is likely to be 30 December. PMGKY will come in as a new Chapter 9 in Finance Act, 2016,” he said. PTI