- Any income assessed u/s 68/69/69A/69/69C/69D (including share capital, unsecured loans, etc) to be taxed u/s 115BBE, which is to be increased from 30% to 60% plus 25% surcharge i.e., 75%
- Penalty if tax u/s 115BBE not paid within the relevant previous year to be imposed @ 10%
- Penalty in case of search cases (where source declared and other conditions are complied) to be increased from 10% to 30%
- Penalty in case of search cases (other than above) to be increased from 10% – 30% to 60%
- Pradhan Mantri Garib Kalyan Deposit Scheme (PMGKDS) 2016 to be introduced.
- Any amount declared in PMGKDS 2016 not to be included in total income of the declarant.
- Tax to be paid @ 30% plus surcharge @ 33% and penalty @ 10% i.e. a total of 49.9% of the amount to be declared before making the declaration
- 25% of the undisclosed income to be deposited in PMGKDS 2016 with lock in period of 4 years with Nil interest
Overview of Amendments Proposed : Existing Provisions VS Proposed Provisions in Income Tax Act
| PARTICULARS | EXISTING PROVISIONS | PROPOSED PROVISIONS |
| General provision for penalty | PENALTY (Section 270A) Under-reporting – @50% of tax Misreporting – @200% of tax (Under-reporting/ Misreporting income is normally difference between returned income and assessed income) | No changes proposed |
| Provisions for taxation & penalty of unexplained credit, investment, cash and other assets | TAX (Section 115BBE) Flat rate of tax @30% + surcharge + cess (No expense, deductions, set-off is allowed)
| TAX (Section 115BBE) Flat rate of tax @60% + surcharge @25% of tax (i.e. 15% of such income). So total incidence of tax is 75% approx. (No expense, deductions, set-off is allowed) PENALTY (Section 271AAC) If Assessing Officer determines income referred to in section 115BBE, penalty @10% of tax payable in addition to tax (including surcharge) of 75%. |
| Penalty for search seizure cases | Penalty (271AAB) (i) 10% of income, if admitted, returned and taxes are paid (ii) 20% of income, if not admitted but returned and taxes are paid (iii) 60% of income in any other case | Penalty (271AAB) (i) 30% of income, if admitted, returned and taxes are paid (ii) 60% of income in any other case |
| Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016’ (PMGKY) | New Taxation and InvestmentRegime | Undisclosed income in the form of cash & bank deposit can be declared: (A) Tax, Surcharge, Penalty payable Tax @30% of income declared Surcharge @33% of tax Penalty @10% of income declared Total @50% of income (approx.) (B) Deposit 25% of declared income to be deposited in interest free Deposit Scheme for four years. |
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