Declare black money and pay 50 per cent fine or 85 per cent if detected

Nearly three weeks after Prime Minister Narendra Modi announced junking high denomination Rs 500 and Rs 1,000 rupee notes, Finance Minister Arun Jaitley introduced a bill to amend the Income Tax law which also provides for black money declarants a mandatory deposit of 25 per cent of the amount disclosed in anti-poverty scheme without interest and a four-year lock-in period. Those who choose to declare their ill-gotten wealth stashed till now in banned Rs 500 and Rs 1,000 rupee notes will have to pay a tax at the rate of 30 per cent of the undisclosed income under the Pradhan Mantri Grabi Kalyan Yojana 2016. Additionally, a 10 per cent penalty will be levied on the undisclosed income and surcharge called PMGK Cess at the rate of 33 per cent of tax (33 per cent of 30 per cent). Further, the declarants have to deposit 25 per cent of the undisclosed income in a scheme to be notified by the government in consultation with the Reserve Bank of India (RBI). The money from the scheme would be used for projects in irrigation, housing, toilets, infrastructure, primary education, primary health and livelihood so that there is justice and equality, said the Statement of Objects and Reasons of the Bill. For those who continue to hold onto undisclosed cash and are caught, existing provisions of the Income Tax law will be amended to provide for a flat 60 per cent tax plus a surcharge of 25 per cent of tax (15 per cent), which will amount a levy of 75 per cent. Besides, if the assessing officer decides he can charge a 10 per cent penalty in addition to the 75 per cent tax. Revenue Secretary Hasmukh Adhia said the deterrent provisions were necessary so that people have the fear of hoarding black money.

Thanks to demonetisation, the crime rate in Chennai which has been hitherto sky rocketing, has nose-dived by 60 per cent in November. The burglars and chain-snatchers seem to have taken a long break as there is no money kept at homes and even the gold cannot be converted to cash, due to the currency crunch.