Smart things to know about taxation of investment under PMGKY

1. Through the proposed Pradhan Mantri Garib Kalyan Yojana (PMGKY), the government wants to give people an opportunity to declare undisclosed income and pay taxes with penalties.

2. This scheme will allow people to deposit previously untaxed money by paying 50% of the total amount: 30% as tax and 10% as penalty on the undisclosed income, as well as 33% of the taxed amount as cess.

3. The declarant will also have to deposit 25% of undisclosed income in a deposit scheme to be notified by the RBI under the ‘Pradhan Mantri Garib Kalyan Deposit Scheme, 2016’.

4. If the declarant refuses the option of using the government deposit scheme, 85% of the amount will be deducted as taxes and penalties.

5. For money that is found in raids, taxes and penalties of nearly 90% of the amount will be levied, leaving a mere 10% with the owner.

(The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)

Source: Economic TImes

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