Pradhan Mantri Garib Kalyan Deposit Scheme (PMGKDS) 2016

Pradhan Mantri Garib Kalyan Deposit Scheme

The Pradhan Mantri Garib Kalyan Deposit Scheme (PMGKDS) 2016 along with new income tax amendment is notified on 17th December, 2016. A Pradhan Mantri Garib Kalyan Deposit Scheme (PMGKDS) is second income declaration scheme. You can declare your unaccounted income under this scheme from 17th December 2016 to 31st March, 2017. The government has kept a longer period for this scheme because the government wants a voluntary declaration of black money by maximum people. Let’s take a look at key features of new income declaration scheme Pradhan Mantri Garib Kalyan Deposit Scheme.

Pradhan Mantri Garib Kalyan Deposit Scheme – Features

  • Under this new declaration scheme, anyone can declare undisclosed income in form of cash or deposit in the bank account.
  • Those who have declared black money under this scheme will be levied a charge of 50%, this charge consists of 30% tax, 33% Pradhan Mantri Garib Kalyan Cess and 10% penalty.
  • In addition to this, the declarant has to make a mandatory deposit of 25% of the declare amount under zero interest Pradhan Mantri Garib Kalyan Deposit scheme for four years.
  • The money deposited in Pradhan Mantri Garib Kalyan Deposit Scheme will be used for the development activities such as irrigation, housing, construction of toilets, infrastructure, education and primary health.
  • You will be left with of 25% money after tax payment and money deposit in Pradhan Mantri Garib Kalyan Deposit scheme.
  • As per this scheme, you need to pay tax upfront. This is opposite to the first income declaration scheme where income declaration was done first and tax recovery was done at later stage.
  • The money disclosed under this scheme will not be included in the income tax return of declarant.
  • Discloser made under this scheme will be kept completely confidential. However, this scheme does not provide any immunity to the declarant under any criminal acts mentioned in section 199-O of the Scheme.

Tax Calculation for the declaration of Income

Case 1 – Disclosure of Black Money – 5 Lakh

Disclosed Income – 5 Lakh

  • Tax @ 30% of 5 Lakh = 1.5 Lakh
  • Surcharge @ 33% of Tax = Rs. 49500
  • Penalty 10% of disclosed income = Rs. 50000
  • Total Amount payable as Tax = 2.49 Lakh
  • 25% amount deposit in Pradhan Mantri Garib Kalyan Deposit Scheme = 1.25 Lakh

Amount left on hand = 1.26 Lakh

Case 2 – Disclosure of Black Money – 10 Lakh

tax disclosed income

Disclosed Income – 10 Lakh

  • Tax @ 30% of 10 Lakh = 3 Lakh
  • Surcharge @ 33% of Tax = Rs. 99000
  • Penalty 10% of disclosed income = 1 Lakh
  • Total Amount payable as Tax = 4.99 Lakh
  • 25% amount deposit in Pradhan Mantri Garib Kalyan Deposit Scheme = 2.5 Lakh

Amount left on hand = 2.51 Lakh

Let’s take maximum benefit of this second income declaration scheme and disclose your black money. Let’s contribute towards nation building by paying tax honestly.

It’s time to help a nation to fight against black money and terrorism.

Let’s stay together and we will definitely win this battle.

Jai Hind

Official Notification about the scheme can be found on Income Tax website.

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5 Comments

  1. Kannan says:

    Hi, I worked in England for sometime and did not bring some of my investment. Now i feel this is the last warning of India government to clean up the tax system. I would like to know, if i bring back the money and claim 50% tax and 25% deposit scheme?? Is that allowed in this scheme?? Pls help. thanks

    • Dear Kannan,

      If money is earned in England and tax is paid on that you can transfer that money to India via TT. If you are holding NRI or RNOR status tax is not applicable on this money.I am not sure that you can bring that money from outside and declare it under PMGKDS scheme or not.I think you should get in touch with qualified CA.

      • Kannan says:

        Thanks for the reply. Meanwhile i did not pay tax on the same money, actually i worked for another company without knowing my boss. Thought i can return to England but it failed so currently no NRI or Rnor status. As per PMGKDS order one can claim this scheme if money in Bank, in my case money not in bank at present so my question is whether i can bring money and claim under PMGKDS?

  2. Kannan says:

    Hi, Some money held up in foreign bank ( i worked for a while in England). Can i bring that money and apply for PMGKDS 2016 scheme??? I mean pay 50% tax and 25% to 4 year lock in period??? Is that allowed with this scheme??? Or my money gone forever???
    Kannan.

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