Black money holders will have to bear taxes and penalties amounting to as high as 137% if they do not admit to or fail to explain the source of undisclosed income after being raided, the income tax department said on Monday.
However, the total levy can touch 107.25% if the undisclosed income is admitted during search operations and that income substantiated, the department said in a release, adding the tax dodgers can come clean by paying 50% on bank deposits post demonetization. If one fails to admit his unexplained income during the course of search and in case, taxes are not paid and he does not substantiate the manner in which income is earned, then the tax incidence will be 137.25%, the tax department said in a release.
However, if undisclosed income is admitted during search, taxes are paid and return is filed before the specified date declaring this income and assesses substantiates the manner in which income is earned, then the tax rate will be 107.25%, the release added. “We are asking people to declare their undisclosed cash deposits in banks, post offices which have not been subject to tax earlier under Pradhan Mantri Garib Kalyan Yojna, 2016 (the scheme),” Principal Chief Commissioner of Income Tax (NWR) Rajendra Kumar said in Chandigarh on Monday.
This scheme which has come into effect on December 17 shall remain open for declarations up to March 31, 2017, he said. If the income is not admitted during search and the assesse is not able to substantiate the earning, it will attract 60% tax, 60% penalty, 15% surcharge, 3% education cess surcharge – amounting to 137.25%.
In case, the income is admitted during search and the assesse is able to substantiate the earning, it will attract 60% tax, 30% penalty, 15% surcharge, 3% education cess surcharge – totalling to 107.25%. The Taxation Laws (Second Amendment) Act, 2016 has amended the penalty provisions in respect of search and seizure cases, the release said.
The existing slab for penalty of 10%, 20% and 60% of income levied under section 271AAB has been rationalised to 30% of income, if the income is admitted and taxes are paid. Otherwise, a penalty at the rate of 60% of income shall be levied, the department said in the release.
Source: dnaindia.com