There is more pain on the way for black money holders. The income tax department on Monday said they will have to bear taxes and penalties amounting to as high as 137 percent if they do not admit to or fail to explain the source of undisclosed income after being raided.
However, the total levy can touch 107.25 percent if the undisclosed income is admitted during search operations and that income substantiated, the department said in a release, adding the tax dodgers can come clean by paying 50 per cent on bank deposits post demonetisation.
If one fails to admit his unexplained income during the course of search and in case, taxes are not paid and he does not substantiate the manner in which income is earned, then the tax incidence will be 137.25 percent, the tax department said in a release.
However, if undisclosed income is admitted during search, taxes are paid and return is filed before the specified date declaring this income and assessee substantiates the manner in which income is earned, then the tax rate will be 107.25 per cent, the release added.
"We are asking people to declare their undisclosed cash deposits in banks, post offices which have not been subject to tax earlier under Pradhan Mantri Garib Kalyan Yojna, 2016 (the scheme)," Principal Chief Commissioner of Income Tax (NWR) Rajendra Kumar said in Chandigarh on Monday.
This scheme which has come into effect on 17 December shall remain open for declarations up to 31 March, 2017, he said.
If the income is not admitted during search and the assessee is not able to substantiate the earning, it will attract 60 per cent tax, 60 per cent penalty, 15 per cent surcharge, 3 per cent education cess surcharge — amounting to 137.25 percent.
In case, the income is admitted during search and the assessee is able to substantiate the earning, it will attract 60 percent tax, 30 percent penalty, 15 per cent surcharge, 3 percent education cess surcharge — totalling to 107.25 percent.
The Taxation Laws (Second Amendment) Act, 2016 has amended the penalty provisions in respect of search and seizure cases, the release said.
The existing slab for penalty of 10 per cent, 20 percent and 60 per cent of income levied under section 271AAB has been rationalized to 30 per cent of income, if the income is admitted and taxes are paid. Otherwise, a penalty at the rate of 60 per cent of income shall be levied, the department said in the release.
Updated Date: Dec 27, 2016 07:52:49 IST