Amending the conditions governing the Pradhan Mantri Garib Kalyan Deposit Scheme, the government has extended time for making interest-free deposits for declarants who have paid tax and penalty under the compliance window, which closed on March 31. The effective date of opening of Bonds Ledger Account, through which declarants were supposed to submit a quarter of their undisclosed income in interest-free deposits, shall be the date of receipt of deposits from the authorised banks to the Reserve Bank of India.
The finance ministry, however, clarified that the date of deposit shall in no case be extended beyond April 30, 2017. “Now the effective date of opening of the Bonds Ledger Account shall be the date of receipt of deposits by the Reserve Bank of India from the authorised banks; wherein the due tax, surcharge and penalty has been received till March 31, 2017, provided that the date of deposit shall in no case be extended beyond 30th April, 2017,” a finance ministry statement said.
This comes as 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 had recently extended the deadline for declarations till April 10, even though the last day for filing tax and penalty was retained to be March 31.
Unlike the government’s earlier tax compliance window of Income Declaration Scheme, 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 as interest-free deposit. 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 this, 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 Bonds Ledger Accounts (BLA) with authorised banks and banking companies.
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 as some bank branches were not aware of the extension in deadline for filing declarations, the official said.