In a notification released today, the Central Board of Direct Taxes (CBDT) issued clarification on newly introduced The Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016.
The Scheme has commenced on 17th December, 2016 and is open for declarations up to 31st March, 2017.
Central Board of Direct Taxes has received queries from stakeholders seeking clarifications about various provisions of the Scheme. The issues raised have been examined and a set of twelve FAQs has been issued on 18 January 2017 vide Circular No.2 of 2017. The Circular inter alia provides clarifications on issues such as the deposits eligible for being declared under the Scheme, eligibility for making a declaration under the Scheme, adjustment of seized cash against the payment of tax, surcharge and penalty under the Scheme etc.
“As per section 199C(1) of the Scheme, a person can make declaration in respect of any income in the form of deposit in an account maintained by the person with a specified entity and as per Explanation to section 199C(2) the banks and post offices come under the definition of specified entity. Hence, the undisclosed income deposited in the accounts specified above can be declared under the Scheme”, the notification said.
“Under the Scheme, only income represented in the form of cash or deposit in an account maintained with specified entity can be declared. The Scheme is hence not available for declaration of an income which is represented in the form of assets like jewellery, stock or immovable property”.
“A declaration under the Scheme can be filed in respect of deposits made in an account maintained with a specified entity by any mode such as cash, cheque, RTGS, NEFT, or any electronic transfer system”, it added.
No credit for advance tax paid, TDS or TCS shall be allowed under the Scheme.
Clause (d) of section 199-O of the Scheme provides that the Scheme shall not apply in relation to any undisclosed foreign income and asset which is chargeable to tax under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. Hence, undisclosed income represented in the form of deposits in foreign bank account is not eligible for the Scheme.
The adjustment of cash seized by the Department and deposited in the Public Deposit Account may be allowed to be adjusted for making payment of tax, surcharge and penalty under the Scheme on the request of the person from whom the cash is seized. However, the said amount shall not be allowed to be adjusted for making deposits under the Pradhan Mantri Garib Kalyan Deposit Scheme.
A person is eligible to declare the said amount under the Scheme. Since the advance was made for procurement of goods (other than immovable property) or services, no penalty under section 271D or 271E of the Act shall be attracted in respect of the said transactions.
Read the full text of the FAQs here.
