The Bill was introduced to amend the Income-tax Act, 1961 and the Finance Act, 2016. The below are the changes proposed vide the amendment bill:
- Amendment to provisions of Section 115BBE (W E F 01-04-2017);
- Proposed to amend the applicable tax rate in relation to income referred to in section 68/69/69A,B,C,D(Undisclosed Income-UI);
- Voluntary disclosure and Income determined by the AO of UI shall be subject to tax @60%.( Existing position- No Voluntary Disclosure). Surcharge @25%. Effective Rate 77.25% including cess. The payment of tax has to be made before 31st March of the relevant previous year.
- Amendment to Provisions of Section 271AAB1 :- by insertion of (1A) to the section
|
Issue |
|
Conditions |
|
Penalty |
|
|
|
|
|
|
|
Search Initiated on or after the |
• |
Assessee admits |
in a |
30% of UI |
|
date on which this Bill get the |
|
Statement U/S 132(4) the |
|
|
|
assent of the President |
|
UI and specifies |
the |
|
|
|
|
manner in which it was |
|
|
|
|
|
derived; |
|
|
|
|
• Pays tax and interest on UI |
|
||
|
|
• Furnishes the ROI for the |
|
||
|
|
|
specified Previous |
Year |
|
|
|
|
declaring UI |
|
|
|
|
|
|
|
|
|
Any other case |
• |
Not covered above |
|
60% of UI |
|
|
|
|
|
|
- New Section 271AAC introduced. This provides for overriding effect of the provisions of the Act except Section 271AAB. It provides for penalty @10% of the tax payable U/S 115BBE (UI). There by effective tax rate including education cess is 83.25%. However, this penalty is not imposed on Voluntary disclosure by the assessee. No Penalty U/S 270A upon the income covered by this section. However, provisions of section 274 and 275 may apply.
- A new Scheme “ PRADHAN MANTRI GARIB KALYAN YOJANA, 2016 introduced by insertion of new chapter IXA.( After the Chapter for IDS, 2016)
- Salient Features of this Scheme:-
?Anyperson may make a declaration on or after notified date in respect of income in the form of cash or deposit in an account maintained by the person with a specified entity2 chargeable to income tax for any AY commencing on or before 01/04/2017.
?Nodeduction of expenditure or allowance and set off of any loss shall be allowed against income included in the declaration.
?SuchIncome shall be chargeable to tax @30%. In addition a new surcharge for the purpose of Union called Pradhan Mantri Garib Kalyan Cess(PMGKC)@33% of such tax.(i.e 30*33.33)
?Inaddition to tax and surcharge penalty shall be levied @10% of UI. (Effective Rate 49.99% - 30% tax+9.99% surcharge+10% penalty)
?Notlessthan 25% of the UI shall be deposited in Pradhan Mantri Garib Kalyan Deposit Scheme, 2016(PMGKDS,2016). This amount shall be deposited before filing the declaration.
?Nointerest will be allowed on the amount of deposit and such deposit shall be allowed to be withdrawn after 4 years from the date of deposit subject to other conditions.
?Thetax,surcharge and penalty shall be paid before filing the declaration.
?Declaration shall be verified by the person referred to in section 140 of the Income-Act.
?Thedeclaration shall be accompanied by the proof of deposit and payment of tax, surcharge and penalty.
?Theamount of UI shall not be included in the total income of the declarant for any assessment year.
?Noentitlement to re-open any assessment or reassessment under the Income tax Act or Wealth Tax Act or claim any set-off or relief in any appeal, reference etc in relation to such assessment or reassessment.
?Theinformation contained in the declaration shall not admissible in evidence against the declarant for the purpose of any proceeding under any Act subject to few exceptions3 . (Immunity from disclosure of the information in the declaration!!)
