An Income Tax Amendment bill was introduced in the parliament on November 29 through which the government proposed to seal loopholes in the existing Income Tax Act, which may have been exploited by black money hoarders.
After demonetisation, the proposed amendments in the taxation law are the next weapon to eject black money
from the country, according to Prime Minister Narendra Modi. The government has also proposed a new income disclosure scheme under the name of the Pradhan Mantri Garib Kalyan Yojana 2016.
Here's all you need to know about the changes to the Taxation Laws (Second Amendment) Bill:
1. The Taxation Laws (Second Amendment) Bill: With effect from April 1, 2016, in case of unexplained cash/assets/investments, etc a 60% tax plus 25% of tax as surcharge plus 3 per cent of tax as cess will be levied.
2. The amendment has proposed to hike applicable tax rate on unexplained cash shown in the Return from the existing 30 per cent to 60 per cent.
3. Additionally, 10% of this tax would also be leviable as penalty under section 271AAC if undisclosed income is not offered in return by taxpayer.
4. This is total of 77 per cent of tax, if the assessee shows it in the Return filing or else tax payable on income will total to 85% (tax+penalty).
5. Penalty for search and seizure has increased from 10 per cent and 20 per cent to 30 per cent (even if assessee admits and shows it in the Income Tax
Return). If not shown, 60 per cent of income will be the penalty.
6. In Pradhan Mantri Garib Kalyan Yojana (PMGKY), apart from 50 per cent of income being taken as tax, penalty and surcharge, 25% of the disclosed income will have to be compulsorily placed in interest-free deposit scheme for four years
7. The existing provision of penalty of 200% for misreporting income under section 270A has not been changed.
8. The provisions of section 115BBE apply mainly in those cases where assets or cash are sought to be declared as 'unexplained cash or asset' or where it is hidden as unsubstantiated business income, and the Assessing Officer detects it as such.
9. There is no limit on legitimate holding of gold
and jewellery, including from inheritance.
10. During search operations conducted by I-T Department, there would be no seizure of gold
jewellery and ornaments to the extent of 500 grams per married women. 250 gms for unmarried lady and 100 gm for male member will not be seized, even if prima facie, it does not seem to be matching with the income record of the assessee.