The tax department may consider giving a breather for those who paid taxes under the recently concluded Pradhan Mantri Garib Kalyan Yojana (PMGKY), but were unable to deposit 25 per cent of their undisclosed funds in interest-free deposits as prescribed by the scheme.
The tax department is considering giving some additional time for making the deposits for those who paid taxes under PMGKY, after having extended the deadline for declarations recently. The Central Board of Direct Taxes (CBDT) had recently extended the deadline for filing declarations under the PMGKY scheme till April 10, even though the last day for filing tax and penalty was retained to be March 31.
“We are getting requests from people to give them some time for making the deposits. We may consider the request, but only for those who have paid the tax under the PMGKY scheme till March 31,” a senior finance ministry official said, adding that subsequently then the time for filing declarations may also be extended.
Unlike the government’s earlier tax compliance window of Income Declaration Scheme (IDS), wherein the person declared first and then paid tax and penalty, declarants under the PMGKY scheme were 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.
According to the PMGKY 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 had to deposit 25 per cent of the undisclosed income in a interest-free deposit scheme for four years. The declarants had 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.
Subsequently, a Certificate of Holding for the BLA was issued which was to be collected from the authorised banks through which the deposit was made. Banks had 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 could show the proofs of prior payments of tax and deposit.
However, because of last minute rush many declarants faced difficulties in making the deposits as some banks’ branches were not aware of the extension in deadline for filing declarations, the official said.
The government has managed to garner only Rs 2,300 crore through its three-month long tax compliance window, PMGKY, which was provided for people to come clean with their unaccounted cash and deposits after demonetisation.