The old notes must be deposited in banks by the end of the year. Deposits over 2.5 lakhs will be studied by tax officials.
Those who acknowledge they have placed black or previously untaxed money in their accounts will pay a 60 per cent penalty in addition to taxes.
A disclosure scheme called the Pradhan Mantri Garib Kalyan Yojana (PMGKY) 2016 allows people to deposit money till April by paying 50 per cent of the total amount — 30 per cent as tax, 10 per cent as penalty and 33 per cent of the taxed amount– that is 10 per cent — as Garib Kalyan Cess.So the taxes and levies will equal nearly 50 per cent of the deposit.
25 per cent of the money that remains after taxes will be available to the account holder.
The other 25 per cent or rest of the black money that’s being converted will be used by the government for four years in a special new fund that will be called the Pradhan Mantri Garib Kalyan Yojana and will be used by to fund welfare schemes. No interest will be paid to the owner for this.
For money that is found in raids, taxes and penalties will take nearly 85 per cent of the amount, leaving 15 per cent with the owner. (For cash whose source can be identified, the penalty will be 30 per cent along with the regular tax rate; for money whose origin cannot be explained, the penalty will double to 60 per cent).
The new proposal was brought to parliament today by Finance Minister Arun Jaitley.It is almost certain to be cleared in this winter session of parliament because it is being considered by the Lok Sabha, where the government has a huge majority.
As a Money Bill, it will be reviewed by the Rajya Sabha, but cannot be rejected by the Upper House, where the government is in a minority.
