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<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"> <html xmlns="http://www.w3.org/1999/xhtml"> <head> </head> <body> <div style="font-family:Verdana, Geneva, sans-serif; font-size:12px; text-align:justify"> <table width="800" border="0" style="border:1px solid #ccc;padding:5px;" align="center" cellpadding="6" cellspacing="0"> <tr> <td align="left" valign="top"> Lok Sabha Passes the Taxation Laws (Second Amendment) Bill, 2016 - (28 Nov 2016) </td> </tr> <tr> <td align="left" valign="top"></td> </tr> <tr> <td align="left" valign="top" style="background-color:#FDEDCE">After the demonetization drive of discontinuing old 500 and 1000 rupees note, the central government has introduced the Taxation Laws (Second Amendment) Bill, 2016 in the Parliament in the ongoing winter session. The bill amends existing tax laws to impose a higher rate of tax and penalty in respect of undisclosed incomes in wake of recent exorbitant cases of undisclosed income post demonetization. Infact, a Scheme namely, ‘Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016’ (PMGKY) has been proposed in the Bill which is an anti-poverty scheme. 
The Bill is aimed to achieve that tax defaulting assessees and black money holders are subjected to tax at a higher rate and strict penalty provision. As per the Bill, the declarant has to deposit 25% of amount disclosed in Pradhan Mantri Garibi Kalyan Yojana (PMGKY) 2016 for a 4 year lock-in period without interest. under the PMGKY scheme, the declarant will have to pay a tax at the rate of 30% of the undisclosed income. Additionally, 10% penalty will be levied on the undisclosed income and PMGK Cess (surcharge) at the rate of 33% of tax (33% of 30%). Further, the declarant will have to deposit 25% of the undisclosed income in a scheme to be notified by the Government in consultation with the Reserve Bank of India. The money from this anti-poverty scheme shall be used for various welfare projects such as health, housing, irrigation, infrastructure, primary education, and livelihood etc. 
However, those who continue to hold their undisclosed cash, they will be levied with flat 60% tax plus a surcharge of 25% of tax (15%), which will amount a levy of 75% alongwith 10% penalty in addition to the 75% tax which can be impose by the income –tax department. 
One of the reason for introduction of aforesaid amendment bill is to ensure that certain existing provisions of the Income Tax Act should not be used be used for concealing black money. Another object of the said bill is on the premise that instead of allowing people to find illegal ways of converting their black money into black again, the government should give them an opportunity to pay taxes with heavy penalty and allow them to come clean so that not only the government gets additional revenue for undertaking activities for the welfare of the poor but also the remaining part of the declared income legitimately comes into the formal. Thus, the motive of the central government is two-fold, first, to stop black money and its loop holes of converting into white and secondly, to get more and more revenue for its welfare schemes.</td> </tr> <tr> <td align="left" valign="top" ></td> </tr> <tr> <td align="left" valign="top" >Tags : Bill, Taxation laws, Amendment</td> </tr> <tr> <td align="left" valign="top">&nbsp;</td> </tr> <tr>  <td align="left" valign="top">Source : newsroom.manupatra.com</td> </tr> <tr> <td align="left" valign="top">&nbsp;</td> </tr> <tr> <td align="left" valign="top">Regards</td> </tr> <tr> <td align="left" valign="top">Team Manupatra</td> </tr> <tr> <td align="left" valign="top">&nbsp;</td> </tr> </table> </div> </body> </html>