The much-hyped Pradhan Mantri Garib Kalyan Yojana (PMGKY) — the government’s second income disclosure scheme — was availed only by 24,000 people as compared to around 65,000 in the first scheme.
The scheme, which was operational between December 17, 2016 and March 31, had given a fresh window to black money hoarders to come clean.
Sources said the tax amount from the scheme was about Rs6,000 -8,000 crore.
“A high level of tax and penalty fixed on the disclosures was one of the key reasons for the scheme not attracting many people,” a government official told HT.
Those availing the scheme had to pay 30% tax on the undisclosed income, a penalty of 10% and a surcharge of 33% on the tax paid, which amounts to roughly 50%.
Another 25% of the amount was to be deposited in a bank for four years without interest. Many shied away from availing the scheme due to stringent clauses and taxes.
- Undisclosed income held in the form of cash can be declared under the Pradhan Mantri Garib Kalyan Yojana with the following conditions:
- Tax at 30% of the income declared
- Surcharge at 33% of the tax
- Penalty at 10% of income declared
- Total tax, penalty and surcharge = 50%
- 25% of declared income will be put in a bank account with a lock-in period of four years
While the identity of those availing the scheme will be kept confidential and there will be no prosecution and penalty, they will not enjoy immunity from other laws, including the Prevention of Money Laundering Act or Narcotics Act, among others.
The income-tax department, meanwhile, extended the deadline for filing returns under PMGKY until May 10. The window is available only to those, who paid taxes and penalty under the scheme by March 31.
The government has also given them time to make the compulsory deposit of 25% of previously undisclosed income till April 30. A total disclosure of Rs65,250 crore of unaccounted wealth in the form of cash and other assets was made during the earlier scheme, launched between June and September last year.
Under the scheme, people had to pay 45% of their undisclosed wealth as tax - 30% tax plus a penalty of 7.5% and a similar 7.5% surcharge - but didn’t have to pay the levy upfront or put money for a lock-in period.
After the closure of the Income Declaration Scheme (IDS) in September, finance minister Arun Jaitley said a total 64,275 declarations were filed online.