The Taxation Laws (Second Amendment) Bill, 2016: Features, Pros and Cons

[simplicity-save-for-later]
2739

The Taxation Laws (Second Amendment) Bill, 2016 has been introduced by the Union Government in the Parliament in November 2016. The bill recompenses existing tax laws in India to impose a higher tax and penalty on undisclosed incomes. The bill also proposes anti-poverty scheme, Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016 (PMGKY).

Features of the Bill

1. The bill makes it obligatory for black money declarants to deposit 25% of disclosed amount in Pradhan Mantri Garibi Kalyan Yojana (PMGKY) 2016 for a lock-in period of 4 years without interest.

2. Black money declarants with banned Rs.1000 and Rs.500 currency notes have to pay 30% tax of the declared amount under the PMGKY scheme.

3. Government has decided imposition of 10% penalty on the undisclosed income and PMGK Cess at 33% of tax i.e. 33% of 30% tax on declared amount. The declarants also need to deposit undisclosed income’s 25% in a scheme, which will be declared by the joint consent of the Government of India and the Reserve Bank of India (RBI).

4. The black money holder who don’t declare the amount under 30% tax scheme, if caught will be charged 60% tax along with a surcharge of 25% of tax, which makes total tax charged 75%. Moreover, the assessing officer may charge an additional 10% penalty with the fixed 75% tax.

5. The Government has also planned to use the money from PMGK for projects in primary education, irrigation, primary health, infrastructure, toilet construction, housing, and livelihood to improve the situation of justice and equality.

Pros and Cons of the Bill:

1. The tax charged on undisclosed income and black money could enable Indian Government to undertake development and anti-poverty programmes.

2. The Taxation Laws (Second Amendment) Bill, 2016 has been brought to remove IT Act, 1961’s redundant provisions that help black money holders in concealing their black money.

3. The bill ensures to impose a high tax and strict penalty on black money earners, but it also puts an unpredictable load on the honest taxpayers of the country.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.