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