Post Raids, Black Money To Attract Over 137% In Tax, Penalty
Total levy can touch 107.25% if the undisclosed income is admitted and substantiated.
Black money holders will have to bear taxes and penalties amounting to as high as 137 percent if they do not admit to or fail to explain the source of undisclosed income after being raided, the income tax department said on Monday.
However, the total levy can touch 107.25 percent if the undisclosed income is admitted during search operations and that income is substantiated, the department said in a media statement, adding the tax dodgers can come clean by paying 50 percent on bank deposits post the demonetisation.
If one fails to admit his unexplained income during the course of search, and in case taxes are not paid and he does not substantiate the manner in which income is earned, then the tax incidence will be 137.25 percent, the tax department said in the statement.
We are asking people to declare their undisclosed cash deposits in banks, post offices which have not been subject to tax earlier under Pradhan Mantri Garib Kalyan Yojna, 2016 (the scheme).Rajendra Kumar, Principal Chief Commissioner, Income Tax Department
This scheme which has come into effect on December 17 shall remain open for declarations up to March 31, 2017, Kumar said.
If the income is not admitted during search and the assessee is not able to substantiate the earning, it will attract 60 percent tax, 60 percent penalty, 15 percent surcharge, 3 percent education cess surcharge – amounting to 137.25 percent.
In case, the income is admitted during search and the assessee is able to substantiate the earning, it will attract 60 percent tax, 30 percent penalty, 15 percent surcharge, 3 percent education cess surcharge – totalling to 107.25 percent.
The Taxation Laws (Second Amendment) Act, 2016 has amended the penalty provisions in respect of search and seizure cases, the release said.
The existing slab for penalty of 10 percent, 20 percent and 60 percent of income levied under section 271AAB has been rationalised to 30 percent of income, if the income is admitted and taxes are paid. Otherwise, a penalty at the rate of 60 percent of income shall be levied, the department said.