Name of the Scheme :
- This Scheme may be called the Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016.
Date of Commencement of Pradhan Mantri Garib Kalyan Yojana 2016 :
- It shall come into force on such date as the Central Government may, by notification, in the Official Gazette, appoint.
Tax Payable under Pradhan Mantri Garib Kalyan Yojana 2016 :
- The declarant under this regime shall be required to pay tax @ 30% of the undisclosed income. [section 194D(1)] .Amount of Tax paid shall not be refundable. [Section 199K]
Penalty Payable under Pradhan Mantri Garib Kalyan Yojana 2016 :
- The declarant under this regime shall be required to pay penalty @10% of the undisclosed income.[section 194E] . Amount of penalty paid shall not be refundable. [Section 199K]
Surcharge Payable under Pradhan Mantri Garib Kalyan Yojana 2016 :
- The declarant under this regime shall be required to pay a surcharge to be called ‘ Pradhan Mantri Garib Kalyan Cess ’ @33% of tax.. [section 194D(2)] .Amount of Surcharge paid shall not be refundable. [Section 199K]
Lock in Period of Deposit under Pradhan Mantri Garib Kalyan Yojana 2016 :
- The declarant shall have to deposit 25% of undisclosed income in a Deposit Scheme to be notified by the RBI under the ‘ Pradhan Mantri Garib Kalyan Deposit Scheme, 2016 ’.
- This amount shall be deposited before the filing of declaration.The deposit shall bear no interest and the amount deposited shall be allowed to be withdrawn after four years from the date of deposit and shall also fulfil such other conditions as may be specified in the Pradhan Mantri Garib Kalyan Deposit Scheme, 2016.[section 194F]This amount is proposed to be utilised for the schemes of irrigation, housing, toilets, infrastructure, primary education, primary health, livelihood, etc., so that there is justice and equality.
Time for making declaration under Pradhan Mantri Garib Kalyan Yojana 2016 :
- Any person may make declaration on or after the date of commencement of this Scheme but on or before a date to be notified by the Central Government in the Official Gazette.
Window scheme for declarants of undisclosed income
First is a 50% tax rate on those who declare undisclosed income. This 50% comprises of:
(a) 30 percent tax
(b) 33% cess called ‘Pradhan Mantri Garib Kalyan Cess’ (33% of 30%; this means a total of 10%).
(c) 10 percent penalty
Total tax rate is (30 + 10+ 10) = 50%.
Besides, the declarants must put the 25% of their disclosed amount in a social security scheme. This will be locked for four years. For channelizing this 25%, a deposit scheme is to be notified by the RBI under the ‘Pradhan Mantri Garib Kalyan Deposit Scheme, 2016’.
The deposit amount is proposed to be utilised for the schemes of irrigation, housing, toilets, infrastructure, primary education, primary health, livelihood, etc. For this, the existing Pradhan Mantri Garib Kalyan Yojana will be modified as an antipoverty and development programme.
(B) Higher tax rate for under-reporting/misreporting of income
A steep tax rate of 60% (comprising basic 30% rate, cess and surcharge) plus 15% from surcharge (25% surcharge means 25% of 60). The tax rate thus becomes 75%. The assessing officer can impose 10% penalty and the total tax rate becomes 85%.
Pradhan Mantri Garib Kalyan Yojana was launched in April 2015, aims to improve the living standard of the poor people especially those who are BPL through concrete government initiatives. The Programme’s working was to engage poor people through workshops where poor can attend.
The old format may not be followed under the PMGKY Cess. More actions and programmes can be expected as the scheme gets sufficient funding through the cess.
