Govt creates email ID to report black money; March 31 deadline for disclosure

New Delhi: Offering one last chance to black money holders, the government today said they have time until March-end to come clean by paying 50 per cent tax on bank deposits of junk currencies made post demonetisation.

Offering tax dodgers confidentially and immunity from prosecution under the new tax evasion amnesty scheme PMGKY, which kicks-in from Saturday, Revenue Secretary Hasmukh Adhia said non disclosure of deposits made in banks after the Rs 500 and Rs 1000 notes were junked will attract stiffer penalties as well as prosecution.

Not declaring the black money under the scheme now but showing it as income in the tax return form would lead to a total levy of 77.25 per cent in taxes and penalty. In case the disclosure is not made either using the scheme or in return, a further 10 per cent penalty on tax will be levied followed by prosecution, he said.

The disclosure scheme is part of The Taxation Laws (Second Amendment) Act, 2016, which was approved by the Lok Sabha earlier this month and has been assented by the President.

To get information on money launderers, the tax department has created a special email address where anyone can provide information about them.

"People who have knowledge of money launderers can give direct information to us. We have created a email id: blackmoneyinfo@incometax.gov.in (for the purpose)," he said.

The Pradhan Mantri Garib Kalyan Yojana (PMGKY) will commence on December 17 and shall remain open for declarations up to March 31, Adhia told reporters in Delhi.

"Beginning tomorrow most of the banks will have challans to be filled for depositing tax for availing the PMGKY scheme. Only after payment of 50 per cent tax and setting aside the 25 per cent of the remaining undisclosed amount for 4 year, a person can avail the PMGKY scheme," he said.

Adhia emphasised that mere depositing of cash in banks will not convert black money into white. Taxes have to be paid.

As per the scheme, taxes will have to be paid first and then the scheme can be availed on production of tax receipt, unlike the recent Income Disclosure Scheme and other such plans wherein disclosures were made first and taxes were recovered later.

Also, as the disclosures will be kept confidential, the holder of unaccounted cash need not disclose it in Income Tax Returns forms.

After the shock November 8 demonetisation announcement, the government allowed the junked Rs 500 and Rs 1000 notes to be deposited in bank accounts.

For those holding unaccounted cash, it offered new tax evasion amnesty scheme wherein 50 per cent tax will be charged on declarations and quarter of the total sum be parked in a non-interest bearing deposit for four years.

Adhia said: "Non declaration of undisclosed cash or deposit in accounts under the Scheme will render such undisclosed income liable to tax, surcharge and cess totaling to 77.25 per cent of such income if it is declared in the income tax returns.

"In case the same is not shown in the return of income a further penalty of 10 per cent of tax shall also be levied followed by prosecution."

The government, he said, through the Financial Intelligence Unit (FIU) is getting data about every single deposit in bank account. Also, Income Tax, Enforcement Directorate and other investigative agencies are keeping a close watch on the information.

"We have information from FIU regarding how much deposits have been made in dormant account, (zero-balance) Jan Dhan, urban cooperative bank, how much repayment of loans have been made in cash, RTGS transfers, withdrawal and hence I-T department has been successful on raids," Adhia said.

With the help of professional agencies, a thorough analysis of all deposits that come till December 30 will be done to try and join all the dots, he said, adding that raids conducted so far are based on information analysis.

"Mere depositing of money in bank account does not make it white. People should not make the mistake of thinking cash deposited in bank is white," he said.

Till taxes are paid and full investigation is completed on the deposits that have been made in bank accounts, black cannot become white.

"We want people to come forward and declare on their own unaccounted cash/deposit. The moment all the deposits come by December 30 we will analyse the voluminous data that we get. We would scrutinise all the data in a non-intrusive manner so that the fear of 'Inspector Raj' is not there in the minds of people," he added.

Adhia said President Pranab Mukherjee last night gave his assent to the Taxation Laws (Second) Amendment Bill and the Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016 scheme will open tomorrow and end on March 31.

CBDT Chairman Sushil Chandra said tax department is keeping an eye on all suspicious activities.

"So the assessees should know that their deposits in bank accounts are being watched. We are examining whether it is explained money or not. Therefore, they should come very very clean under this scheme which is the last window available for anyone," he said.

Giving details of the PMGKY scheme, Adhia said declaration of undisclosed income under it can be made by any person in the form of cash or deposits in an account with bank or post office or a specified entity.

"Tax at the rate of 30 per cent of the undisclosed income, surcharge of 33 per cent of tax and penalty of 10 per cent of such income is payable besides mandatory deposit of 25 per cent of the undisclosed income in the Pradhan Mantri Garib Kalyan Deposit Scheme 2016. The deposits are interest free and have a lock-in period of four years," he said.

The income declared under the Scheme will not be included in the total income of the declarant under the Income Tax Act for any assessment year.

Also, declarations made under the Scheme shall not be admissible as evidence under any Act like Central Excise, Wealth Tax or Companies Act. However, no immunity will be available under criminal acts.

Adhia said the provisions for levy of penalty for misreporting of income at the rate of 200 per cent of tax payable under section 270A of the Income Tax Act have not been amended and shall continue to apply in respect of cases falling under the said section.

The Taxation Laws (Second Amendment) Act 2016 has also amended the penalty provisions in respect of search and seizure cases. The existing slab of penalty of 10, 20 and 60 per cent of income has been rationalised to 30 per cent of income, if the income is admitted and taxes are paid.

Otherwise a penalty of 60 per cent of income shall be levied. Taxmann Director Rakesh Bhargava said that PMGKY is the only option left with tax-evaders as any detection of

unaccounted income thereafter would attract tax ranging from 83.25 per cent to 137.25 per cent.

"Taxpayers are advised not to make declaration of third party money under PMGKY," he said.

Meanwhile, Central Board of Direct Taxes (CBDT) chairman Sushil Chandra said on Friday that Rs 2,600 crore in concealed income has been disclosed so far following demonetisation.

The government has seized over Rs 316 crore including Rs 80 crore in new notes in raids so far. Besides this, jewellery of Rs 76 crore had also been seized. Thus, the total amount unearthed so far amounted to Rs 393 crore, he added.

There is no official estimation of black money either before or after November 8 -- the day government announced scrapping of old Rs 500 and Rs 1,000 notes, Finance Minister Arun Jaitley said earlier on Friday.

"There is no official estimation of the amount of black money either before or after the government's decision of November 8, 2016 declaring that bank notes of denominations of the existing series of the value of Rs 500 and Rs 1000 shall cease to be legal tender with effect from November 9," he said in a written reply in Lok Sabha.

The searches conducted by Income Tax Department between April 2014 and November 2016 on 1,356 groups of assess led to admission of undisclosed income of Rs 31,277 crore apart from seizure of undisclosed assets worth Rs 2,164 crore, he added.

Besides, 14,044 surveys conducted during the period, resulted in detection of undisclosed income of Rs 30,492 crore. Replying to another question on whether the government has received any proposal from the employees of LIC to provide another opportunity to those who have not chosen pension option earlier, Jaitley replied in affirmative.

"The proposal was examined and a view has been taken that no more options for pension may be extended to employees of public sector insurance companies," he said.