» Pradhan Mantri Garib Kalyan Yojana Deposit Scheme (PMGKYDS) 2016

The Lok Sabha has passed the Pradhan Mantri Garib Kalyan yojna (Second Amendment) Bill, 2016 in the Lok Sabha. The Bill was introduced as some of the existing provisions of the Income Tax Act, 1961 can possibly be misused for concealing black money. The new bill attempts to impose a higher rate of tax and penalty in respect of undisclosed incomes.

Pradhan Mantri Garib Kalyan Yojana  (PMGKY) 2016 along with new income  tax amendment is notified on 17th December, 2016. A Pradhan Mantri Garib Kalyan Yojana  (PMGKY) is second income declaration scheme. You can declare your unaccounted income under this scheme from 17th December 2016 to 31st March, 2017. The government has kept a longer period for this scheme because the government wants a voluntary declaration of black money by maximum people. Let’s take a look at key features of new income declaration scheme Pradhan Mantri Garib Kalyan Deposit Scheme.

• Declarant of undisclosed income needs to pay 30% tax, 10% penalty and 33% Pradhan Mantri Garib Kalyan Cess on the tax, all of which add up to around 50%.
• Besides, declarant must make mandatory deposit of 25% of undisclosed income in the zero-interest Pradhan Mantri Garib Kalyan Deposit Scheme, 2016 with lock-in period of 4 years.
• The income declared under it will not be included in the total income of the declarant under the Income-tax (IT) Act for any assessment year.
• Besides, declarations made under it will be kept confidential and shall not be admissible as evidence under any Act (ex. Wealth-tax Act, Central Excise Act, Companies Act etc.).
• However, declarant will have no immunity under Criminal Acts mentioned in section 199-O of the Scheme.
• Non declaration of undisclosed cash or deposit in accounts under this Scheme will render tax, surcharge and cess totalling to 77.25% of such income, if declared in the return of income.
• In case the same is not shown in the return of income a further penalty @10% of tax shall also be levied followed by prosecution.
• Under this new declaration scheme, anyone can declare undisclosed income in form of cash or deposit in the bank account.
• Those who have declared black money under this scheme will be levied a charge of 50%, this charge consists of 30% tax, 33% Pradhan Mantri Garib Kalyan Cess and 10% penalty.
• In addition to this, the declarant has to make a mandatory deposit of 25% of the declare amount under zero interest Pradhan Mantri Garib Kalyan Deposit scheme for four years.
• The money deposited in Pradhan Mantri Garib Kalyan Deposit Scheme will be used for the development activities such as irrigation, housing, construction of toilets, infrastructure, education and primary health.
• You will be left with of 25% money after tax payment and money deposit in Pradhan Mantri Garib Kalyan Deposit scheme.

1 What is the minimum and maximum limit for depositing in the scheme?

The deposit by a declarant shall not be less than twenty-five per cent of the undisclosed income declared under sub-section (1) of section 199C of the Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016. Deposit shall be made in multiples of ₹ 100.

2. After making the deposit, will any documentary evidence be issued?

On deposit, an acknowledgement receipt mentioning name of declarant and amount deposited will be duly authorized and provided by the bank from which application was made. Subsequently a certificate of holding for the BLA will be issued which may be collected from the authorized bank.

3. When will the deposit be repaid?

Repayment of the deposit will be made after a period of 4 years from the effective date of deposit (ie., date of tender of cash or the date of realization of draft or cheque or transfer through electronic transfer)

4. What are the procedures involved during redemption?

On the date of maturity, the proceeds will be credited to the bank account as per the details on record.

In case there are changes in any details, such as, account number, IFSC code, email ids etc then the investor must intimate Reserve Bank Of India , through the authorized banks promptly.

5. Can the deposit made into this scheme be prematurely redeemed ?

No, option for premature redemption of the BLA is not available.

6. What are the payment options for depositing in PMGKS?

The deposit shall be made in the form of cash or draft or cheque drawn in favour of the authorised bank accepting such deposit or by electronic transfer.