Providing a window to black money holders, the government on Monday proposed to levy a total tax, penalty and surcharge of 50 per cent on the amount deposited post demonetisation while higher taxes and stiffer penalty of above 80 per cent await those who don't disclose but are caught.
Q. What is the new scheme?
A. The government has proposed that the people holding black money can declare their black money and pay almost 50 percent of income as tax & penalty.
Q. Is there anything else I have to pay?
A. Apart from 50 percent tax and penalty, you will have to deposit 25 percent of declared income in interest-free Deposit Scheme for four years. This would essentially mean that you immediately get 25 percent of the declared amount in the form of white money.
Q. How has the government arrived at the figure of 50 percent?
A. The government has decided to levy 30 percent as tax on undisclosed income. On this 30 percent, one has to pay 33 percent as a surcharge and 10 percent of the declared amount will be charged as penalty. This would mean you will have to pay 49.9 percent.
Q. Why this scheme?
A. The government was getting a feedback of a lot of black money conversion through illegal routes. This proposal would give an opportunity to people to come clean and in turn, the government will also get additional revenue. Apart from this, IT Authorities had also brought to the knowledge of government that there are existing provisions in the IT Act that could be used for concealing black money.
Q. What if I had submitted below 2.5 lakh rupees in my bank account?
A. Under the Income tax act, income up-to 2.5 lakh is exempt from tax. However, if you have given your account for hoarding of black money, you can land into trouble.