After much opposition and resentment from the black money holders, the common man, and opposition; the Modi’s government has decided to give people another chance of converting their black money into white money.
Yes, stepping up its efforts to trace and eradicate black money holders, now the government has come to their rescue and is planning to introduce a scheme in which they can deposit and declare their unaccounted money.
According to a proposal passed by the cabinet, the new rule is like a ‘second chance’ for black money holders to avoid prison. The government will impose 50% tax on unaccounted cash which will be deposited in the form of old currency notes till December 30.
The government will need to make an amendment to the tax law for introducing this scheme and it is planning to introduce the amendments on Monday or Tuesday in the ongoing winter session, after getting the President’s approval.
Here are the complete details of the scheme:
- At least 50% tax will be charged on the unaccounted cash which will be deposited in banks in form of Rs. 500 and Rs. 1000 currency notes till December 30; however, it is almost equivalent to what the agents are charging for laundering the unaccounted cash.
- Those who will make such deposits won’t be allowed to withdraw their untaxed money for at least 4 years.
- The govt. is also planning to come out with a bond which will be used to keep the 25% lock-in money and it wouldn’t be withdrawn before 4 years.
- If a person doesn’t declare these funds in ITR, then 90% tax and penalty will be charged.
- The deposits made above the prescribed limit with the old notes of Rs. 500 and Rs.1000 will be charged with 50% tax under the amendment of IT Act which has been approved by the cabinet last night.
- There has been a huge rise in the bank deposits, especially in the Jan Dhan accounts after the announcement of Demonetization. Deposits of Rs. 21,000 crore in only two weeks is giving an impression that something fishy is happening in these accounts.
- In the beginning, 200% penalty was announced for the deposits above Rs. 2.5 lakhs made between November 10 and December 30. However, it doesn’t seem to be legally sound enough to the Income Tax authorities.
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This move by government is a wonderful chance of converting their black money into white money and it is no less than a blessing for black money holders in the current scenario!!
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