December 1st, 2016
Tax Options To Hold Black Money
The government has proposed to levy a tax, penalty, and the surcharge of 50 percent on the amount deposited post demonetization. Those who didn’t disclose their unaccounted money and were exposed will have to pay higher tax and a stiffer penalty up to 85 percent.
The tax will be imposed on undeclared income pertaining to Assessment Year 2017-18 or earlier years.
- There are no consequences for people who can satisfactorily explain the source and nature of cash deposit.
- Those taxpayers who are unable to explain source and nature of cash deposits will have to face the tax penalty. The tax levied will be 60 percent and surcharge will be 25% of the tax and cess will be calculated as 3 percent of combined tax and surcharge amount.
- Those taxpayers who have made a declaration under Pradhan Mantri Garib Kalyan Yojana and have paid tax, surcharge and penalty and have deposited 25% of the undisclosed income then the tax impact will be 30 percent and surcharge levied will be 33% of the tax and 10 percent as a penalty will be charged, as reported by The Economic Times.
- The people who neither own up to the income in ROI nor opt for a declaration under the scheme will bear 60 percent tax. 25% of the tax amount will be levied a surcharge and 3 percent cess will be added to it.
- If any undisclosed income is detected in the search and the taxpayer can substantiate the manner in which the income was derived and pays up tax then the tax burden will be 60% and 25% of tax as surcharge and 3% of tax+surcharge as cess.
6. In case, if the person is not able to substantiate the amount after Presidential assent to Bill, then the tax levied will be 60 percent and surcharge imposed will be 25 percent of the tax and 3 percent cess calculated on tax+surcharge.