The folly in PMGKY ads by govt: How can tax evaders be good citizens ever?


The income tax department advertisement on television channels exhorts people who had deposited their ill-gotten demonetised Rs 500 and Rs 1,000 rupee notes into banks during the period the deposit window was kept open i.e. from 10 November 2016 to 30 December 2016 to behave like good citizens and declare under the ongoing Pradhan Mantri Garib Kalyan Yojana (PMGKY) before it expires on 31 March 2017.

The exhortation part is all right but the eulogisation part rankles. Indeed it stinks. It is one thing to say that it makes sense to avail of the amnesty under the scheme which consists in getting away with a 49.9 percent tax plus locking up of another 25 percent in an interest-free four year deposit instead of having to pay 77.25 percent in addition to doing a jail term if subsequently caught but quite another to confer the honor of ‘good citizen’ on the declarants.

Commuters sit in cars in front of the income tax building during a traffic jam in Kolkata April 2, 2015. U.S. and European investor groups have called for the Indian government to urgently clarify its tax regime for foreigners, following surprise attempts by tax inspectors to claw back money they say is owed on years of previously untaxed gains. REUTERS/Rupak De Chowdhuri - RTR4VVMQ

Representational image. Reuters

For, the truth is both -- the declarants and those not declaring -- are crooks. It is wrong to believe and encourage the notion that those participating in amnesty schemes are good citizens. If anything they are good opportunists who make the most of a bad situation and what is more often repeatedly, blithely ignoring the last-chance-to-return-to-the-path-of-rectitude rhetoric cum admonishment accompanying most of the amnesty schemes.

Experience shows that evaders instead of paying taxes regularly when they should, smugly bide their time in anticipation of yet another amnesty scheme that is invariably rolled out with unfailing regularity in this country. They then wash their tax-related sins getting in the process just a slap on the wrist when honest taxpayers---the salaried class by and large---have already coughed up their taxes faithfully through their noses over the years.

Let the income tax department by all means infuse a sense of urgency on crooks and get them to declare under PMGKY before 31 March 2017 which is hardly a few days away. And let the ads highlight its USP---49.9 percent tax is less than 77.25 percent plus the ignominy of a jail term---but let it not go overboard and call the declarants a good citizen. Pray if they are good citizens what are the honest taxpayers? Perhaps suckers as many of them feel with abject despondence each time an amnesty or quasi-amnesty scheme is rolled out. Prime Minister Narendra Modi promised reward for the salaried class from out of the proceeds of the 2016 income declaration scheme (IDS). But sadly it hasn’t yet been delivered.

The Modi government is desperate to make the scheme a success so that its decision to go for demonetisation of high value notes on 8th November 2016 is vindicated in retrospect. But the reports are not very encouraging. As of 28 February 2017, the PMGKY had but collected declarations aggregating to a measly Rs 2,500 crore. It is true that most of the amnesty schemes witness a last minute surge in declarations and collections. But none of these warrant placing declarants and wannabe declarants on a pedestal which conferring on them the good citizens honor amounts to.


Perhaps the Modi government did not do enough to send fear down the spines of crooks by cracking down on the suspects who brazenly deposited their ill-gotten high denomination notes. That would have served as a warning and egged the crooks to embrace PMGKY. The let up in the crackdowns might have been on account of getting busy with GST implementation and the UP elections but none of these alibis wash.

Post 31 March 2017, the Modi government must walk the talk and gun after the crooks who have had the gumption of depositing their ill-gotten high denomination notes and sitting tight on them without bothering to declare under PMGKY, using the much-vaunted banking cum income tax software that is supposed to flag off abnormal deposits. Otherwise, its stock will go down in the eyes of both the honest taxpayers and the cognoscenti.


Published Date: Mar 27, 2017 04:02 pm | Updated Date: Mar 27, 2017 04:19 pm



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