A scheme namely Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana (PMGKY), 2016 has been introduced in the parliament to allow people to come clean by paying taxes with heavy penalty.
On November 8th, 2016 government has withdrawn the legal tender status of denomination of the value of Rs.500 and Rs.1000 (also known as Specified Bank Notes (SBN)) to curb black money in the country. The government decided to launch the scheme PMGKY to discourage people from finding illegal ways of converting their black money into black again.
Salient features of PMGKY
Undisclosed income in the form of cash & bank deposit can be declared:
A. Tax, Surcharge, Penalty payable:
- Tax @ 30% of income declared
- Pradhan Mantri Garib Kalyan Cess @33% of tax
- Penalty @10% of income declared
B. Pradhan Mantri Garib Kalyan Deposit Scheme, 2016: 25% of declared income to be deposited in interest free Deposit Scheme for four years under. This amount is proposed to be utilised for the schemes of irrigation, housing, toilets, infrastructure, primary education, primary health, livelihood, etc.
Benefits of PMGKY
- It will allow people to come clean by paying taxes and their declared income legitimately comes into the formal economy.
- The Government will get the additional revenue for undertaking activities for the welfare of the poor.
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