New Delhi, November 29: Amid ruckus over demonetisation and Prime Minister Narendra Modi’s prevailing absence from the house, the Lok Sabha on Tuesday passed the Bill to amend Income Tax Act with a voice vote, sans debate.
The amendment to the income tax bill proposes to impose tax, penalty and surcharge on deposits made after the note ban dating November 10.
The opposition was upset as the speaker Sumitra Mahajan did not approve any of the amendments proposed by them and there was no debate in the house for the same.
Under the new amendment government has proposed to levy a total tax, penalty and surcharge of 50% on the amount deposited post demonetization. The bill also proposes higher taxes and stiffer penalty up to 85% for those who do not disclose their income.
The Money Bill now shall be passed from the Rajya Sabha within 14 days and go to President for the consent. Even if it ceases to be passed by RS, it automatically becomes the law. The bill is bound to be passed in Rajya Sabha or Upper House as opposition cannot demand changes there. The government is in a minority in RS. The upper house can only make suggestions which LS is not obliged to consider.
Lawmaker NK Premachandran of the Revolutionary Socialist Party said outside the parliament that the opposition is thinking about taking a complaint to the president. The opposition also wants to know if the government had sent across the opposition amendments to the President. Another point of contention is why the House was not informed under the rules about the amendments.
Here are key highlights of the proposed amendment to tax laws:
- If your undisclosed income comes clean, you shall be liable to pay tax at 30 per cent of the undisclosed income and 10 % penalty and a 33 % of surcharge that would collectively amount up to an effective tax rate of around 50 %.
- The surcharge is called as Pradhan Mantri Garib Kalyan Cess.
- Besides tax surcharge and penalty, you are also required to deposit 25 % of undisclosed income in a scheme under Pradhan Mantri Garib Kalyan Deposit Scheme, 2016. This deposit will not earn any interest and would be locked in for 4 years. That means, you could withdraw only after 4 years of deposit.
- Those who would be caught by tax authorities with undisclosed cash, would be taxed at the rate up to 85 %.
- Deposits already made after November 10 will be covered under Pradhan Mantri Garib Kalyan Deposit Scheme. This amount shall be utilised for the programmes of irrigation, housing, toilets, infrastructure, primary education, primary health and livelihood.