Now, use old Rs 500 and Rs 1000 notes for paying tax and penalty under new income disclosure scheme

The payments under the new black money disclosure scheme Pradhan Mantri Garib KalyanYojana (PMGKY), can be made till December 30, 2016.

New Delhi: The payment towards tax, surcharge, penalty and deposit under the new black money disclosure scheme Pradhan Mantri Garib KalyanYojana (PMGKY), can be made in old bank notes of Rs 500 and Rs 1,000 up to December 30.

 The taxation and investment regime for Pradhan Mantri Garib KalyanYojana (PMGKY), 2016 has commenced on December 17 and is open for declarations up to 31st March, 2017.

The payment of tax, surcharge and penalty under the scheme is to be made through challan ITNS- 287 and the deposits are to be made in the Pradhan Mantri Garib Kalyan Deposit Scheme, 2016.

This is the second such income disclosure scheme gives tax evaders another chance to come clean. The first scheme, which began in June closed on 30 September.

However, unlike the earlier income declaration scheme, a tax evader will have to first pay the tax, put money in the deposit scheme and then make a declaration—either online or at an income tax office.

The government has tightened noose on black money holders and is planning to apply technology like data analytics and data mining to sift accounts of black money holders from the deposits made up to December 30.

The new scheme offers tax dodgers confidentially and immunity from prosecution.

Under the scheme, a declarant of undisclosed income needs to pay a tax of 30%, a penalty of 10% and a Pradhan Mantri Garib Kalyan Cess of 33% on the tax, all of which add up to around 50%.

In addition, the declarant will have to deposit 25% of the undisclosed income in the zero-interest Pradhan Mantri Garib Kalyan Deposit Scheme for four years. He needs to furnish his permanent account number (PAN) while making his declaration. Part of the proceeds of the scheme will be used for welfare schemes for the poor.