What is Pradhan Mantri Garib Kalyan Yojna?

The government has introduced its last and final amnesty scheme for encouraging the disclosure of concealed/unaccounted income. This is called the Pradhan Mantri Garib Kalyan Yojna. 

Here is all you need to know about the scheme:

  • Has it been introduced under an act or just through an executive resolution?:
    • It has been introduced under Taxation Laws(Second Amendment) Act, 2016.
  • When will it come into effect and what’s the duration of the scheme?
    • It has come into effect from 17th December, 2016 and will remain open till 31st March, 2017.
  • What are the key provisions of the scheme?:
    • Disclosure can be made by any person in respect on undisclosed income in the form of cash or deposits in an account with bank or post office or specified entity.
    • Declarant has to pay:
      • 30%  tax.
      • 33% Pradhan Mantri Garib Kalyan Cess. 
      • 10% penalty.
    • This sums up to around 50%
    • Pradhan Mantri Garib Kalyan Deposit scheme: 25% of the undisclosed income in a zero interest deposit account with a lock-in period(minimum time till which deposit remains in the account) of 4 years.  pradhan-mantri-garib-kalyan-yojana
    • The income declared will not be included in the total income of the declarant under the I-T Act.
    • Also, declaration to be kept confidential .
    • If a person with concealed income do not declare the same under this act, it will attract a penalty and surcharge upto around 78% .

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