Finance Ministry writes to Lenders: Banks not accepting PMGKY tax to face ‘de-authorisation’

Many banks not accepting payments due to lack of awareness, technical reasons

By: ENS Economic Bureau | New Delhi | Published:February 25, 2017 2:37 am
Arun Jaitley, Jaitley in UK, Jaitley visits UK, Jaitley meets investors, UK investors, indian express news Union Finance Minister Arun Jaitley 

With banks faltering in acceptance of tax payments and the corresponding linkage of details with the assessee’s online tax profile, Centre has warned them of “de-authorisation” under the ongoing Pradhan Mantri Garib Kalyan Yojana (PMGKY). The finance ministry has written to authorised banks to accept deposits under the PMGKY, asking them to issue directions to all branches to make necessary changes in their system/software to accept the tax.

Watch What Else Is Making News

“Non-compliance of this order may be viewed seriously and may lead to de-authorisation of that branch in case of refusal to accept taxes,” the ministry said.

Explaining the need to issue the advisory to banks, a tax department official said: “Some of the banks were not updating the tax payment details online and hence, people were being unable to declare under the PMGKY scheme, despite having made tax payment and deposits.”

Under the PMGKY scheme, people are first required to pay tax and park a quarter of the total undisclosed sum in interest-free deposit and then become a declarant under the scheme, unlike last year’s Income Declaration Scheme (IDS), wherein the person declared first and then paid tax and penalty.

Over the last few days, there were complaints that many banks were not accepting payments of tax under PMGKY due to lack of awareness of prescribed challan and certain technical reasons. Accordingly, the matter was referred to Principal Chief Controller of Accounts, who issued an order directing banks to accept taxes and update details accordingly under PMGKY or face action.

The government had launched PMGKY on December 1, offering a chance for people to come clean with their unaccounted money post demonetisation.

According to the scheme, a 30 per cent tax plus 33 per cent surcharge on the tax and a 10 per cent penalty is proposed to be levied on the undisclosed income in the form of cash and deposits. Along with the tax, penalty and surcharge, the declarant will have to deposit 25 per cent of the undisclosed income in a interest-free deposit scheme for four years. The declarants have to make the interest-free deposits in the form of Bond Ledger Accounts (BLA) with authorised banks and banking companies and those will be maintained with the Reserve Bank of India.

The acknowledgement receipt mentioning name of declarant and amount deposited will be duly authorised and provided by the bank from which application was made. Subsequently, a certificate of holding for the BLA will be
issued which may be collected from the authorised banks through which the deposit was made.

Banks have to accordingly link the details of the payments made towards deposits with the Income Tax Department’s website, so that the declarant under the scheme can show the proofs of prior payments of tax and deposit.
The government had decided that up to December 30, 2016, the payment towards tax, surcharge, penalty and deposit under the PMGKY can be made in old bank notes of Rs 500 and Rs 1,000 denomination.

The Taxation and Investment Regime for PMGKY, 2016 commenced on December 17, 2016 and is open for declarations up to March 31, 2017. The payment of tax, surcharge and penalty under the Scheme is to be made through challan and the deposits are to be made in the Pradhan Mantri Garib Kalyan Deposit Scheme, 2016.

Video of the day

For all the latest Business News, download Indian Express App

    Live Cricket Scores & Results