Government allows old notes for paying tax, penalty under PMGKY

Following the confusion created on depositing old notes in bank accounts more than once, the government on Thursday clarified that payment towards tax, surcharge, penalty and deposit under the Pradhan Mantri Garib Kalyan Yojana (PMGKY) can be made with demonetised high value notes.

"Up to 30.12.2016, the payment towards tax, surcharge, penalty and deposit under the Pradhan Mantri Garib KalyanYojana (PMGKY), can be made in old Bank Notes of Rs 500 and Rs 1,000 denomination issued by the RBI," a Finance Ministry statement here said.

"The payment of tax, surcharge and penalty under the Scheme is to be made through challan ITNS-287 and the deposits are to be made in the Pradhan Mantri Garib Kalyan Deposit Scheme, 2016," it added.

The PMGKY scheme -- which the government described as another chance for people to come clean on their unaccounted income -- came into effect from December 17 and will remain open for over three months.

"Investments in taxation regime or Pradhan Mantri Garib Kalyan Yojana is the last chance for people. Any person or company can disclose unaccounted income and pay 49.9 per cent, to be precise, as tax, surcharge and penalty along with 25 per cent amount in interest-free deposits for four years," Revenue Secretary Hasmukh Adhia told media persons here last week while announcing the scheme.

The scheme allows people to deposit money in their accounts by paying 50 per cent of the total amount -- 30 per cent as tax, 10 per cent as penalty and 33 per cent of the taxed amount, that is 10 per cent, as Garib Kalyan Cess.

This amount is proposed to be utilised for the schemes of irrigation, housing, toilets, infrastructure, primary education, primary health and livelihood.

The scheme is a part of the Taxation Laws (Second Amendment) Bill, 2016, passed by Parliament on November 29 to amend the income tax laws to provide for stiffer penal tax in the wake of the November 8 demonetisation.

--IANS

bc/dg