Source: News Bharati English29 Nov 2016 16:26:15

New Delhi, November 29: Income Tax Bill was passed in the Lok Sabha amid slogans from the Opposition against the government over the issue of demonetization. Finance Minister Arun Jaitley spoke during a debate on Amendment to Income Tax Bill.  The bill, which was tabled as a money bill in the Lok Sabha on Monday, proposes another income disclosure scheme giving tax payers to declare their undisclosed income but with more stringent penalties and higher tax rates.
Debating over the bill, Finance Minister Arun Jaitley said that when the government announced the demonetization move, the intention was to clearly wipe out the black money from the country, but some people were still trying to convert the black money even after the announcement.

“The aim is to ensure this money comes into the mainstream. The rich’s black money will be used for the welfare of the poor,” Jaitley said. The bill also proposes amendments to the Income Tax Act and the Finance Act to plug loopholes which may have provided tax evaders a way to legalize their black money.

Opposition parties, including the Congress, the Trinamool Congress (TMC), the Biju Janata Dal (BJD), opposed the introduction of the bill.

Under the income disclosure scheme proposed by the government, the declarant can declare his undisclosed income, pay a tax of 30% and penalty of 10% on the undisclosed income and a surcharge called ‘Pradhan Mantri Garib Kalyan Cess’ of 33% on the tax, all of which totals up to around 50%.A part of the proceeds from this scheme are aimed to be used for the welfare of the poor.

In addition, the declarant will have to deposit 25% of undisclosed income in a zero-interest deposit scheme that will be called Pradhan Mantri Garib Kalyan Deposit Scheme, 2016. This money will be utilized for developmental activities such as irrigation, housing, construction of toilets and infrastructure, primary education and primary health.

In case the assesse does not declare the illegal income, the government proposes a tax burden of more than 82% and a stringent penalty in cases where such income has been unearthed through a search-and-seizure operation.