Amid several adjournments and ruckus created by the opposition on Tuesday, the Lok Sabha passed by voice vote a bill to amend the income tax laws to provide for stiffer penal tax in the wake of the November 8 demonetisation.
The bill, which has been labelled a money bill, can become law even without it being approved by the Rajya Sabha.
The amendment bill -- passed amid opposition protests and slogan-shouting against the government -- will facilitate levy of 60 per cent tax apart from additional surcharge as well as additional penalty on undisclosed income or investment or cash credit deposited in banks after the November 8 demonetisation.
The lower house of Parliament was disrupted repeatedly on Tuesday as the opposition created a ruckus over the fiscal chaos after demonetisation. The opposition was adamant over its demand for a debate on the contentious issue under a rule governing adjournment motion that entails voting in the end.
Opposition members raised slogans against the Centre's decision to scrap Rs 500 and Rs 1,000 currency notes, which led to cash crunch across the country.
The first adjournment came soon after the house met at 11 a.m. when Speaker Sumitra Mahajan's attempts to proceed with Question Hour failed. The house was first adjourned till 11.30 a.m, then till noon and further till 2 p.m.
The scene was no different after lunch, paving the way for another adjournment till 2.30 p.m.
At 2.30 p.m., as Union Finance Minister Arun Jaitley moved the Taxation Laws (Second Amendment) Bill, 2016, for consideration and passage, the opposition objected.
Jaitley said the bill is trying to plug the loopholes in the existing Acts to ensure that tax evaders are not able to legalise their black money.
"The aim is to ensure this (black) money comes into the mainstream. The black money of the rich will be used for the welfare of the poor," Jaitley said.
The bill proposes a scheme for declaring undisclosed income, stringent penalties and higher tax rates. A part of the proceeds from this scheme are aimed to be used for the welfare of the poor.
Congress leader Mallikarjun Kharge said the debate on demonetisation should be taken up first while Trinamool Congress leader Sudip Bandyopadhyay suggested clubbing the debate on the bill and demonetisation, which the Speaker rejected.
Members complained that they were not able to move for changes as certain amendments needed President Pranab Mukherjee's assent.
Amendments to a bill that may relate to drawing money from the Consolidated Fund of India need President's approval.
As the opposition protested, Mahajan's said the bill should have been debated but could not be since the house was not maintaining order.
Amid the ruckus, the bill was passed by voice vote, and the house was adjourned for the day.
According to the Taxation Laws (Second Amendment) Bill, 2016, the declarant will have to pay a tax of 60 per cent and an additional surcharge of 25 per cent of the tax (i.e. 15 per cent of such income), resulting in a total tax component of 75 per cent.
The stiffer penalty will be applicable to undisclosed income or investment or cash deposited in banks after the demonetisation of high-value currency notes.
The passed bill also gives discretionary power to assessing officer to increase the penalty by 10 per cent of the total tax, thus raising the total to 82.5 per cent (75 per cent, plus 10 per cent of that amount) of the unexplained/concealed income. No deductions or set-off is allowed on this amount.
The government has also come up with an income disclosure scheme called the 'Pradhan Mantri Garib Kalyan Yojana (PMGKY) 2016' which allows people to deposit money in their accounts till April 1, 2017, 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.
The scheme's duration will be announced later. The declarant will get immunity from prosecution under any law.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)