The Hyderabad High Court has directed the Income Tax authorities to relax some of the conditions of the recent Pradhan Mantri Garib Kalyan Yojana, introduced by the Central Government post-demonetization.
A division bench comprising Justice V. Ramasubramanian and Justice J. Uma Devi was hearing a petition filed by a lady doctor who wanted to utilize the scheme, sought for a direction to the I-T authorities not to prohibit her in any manner from utilisation of the seized cash for the purposes of making deposits under Section 199F of the Income Tax Act 2016 in RBI bonds under the scheme.
The petitioner urged that when she attempted to utilise the scheme, she realized that there are far too many hurdles to avail it and she now has to borrow Rs 83 lakh and deposit it in the bank to remain eligible to utilise the scheme. While allowing the plea, the bench noted the petitioner has a current balance of Rs 7.5 crore after paying advance tax and making other payments and I-T authorities were treating this money as seized currency.
The scheme mandates deposit 30 per cent of the seized currency towards tax and 10 percent as penalty and the declarant have to pay cess that is equivalent to 33 per cent of the money. In the present case, the petitioner paid as tax which works out to Rs 5.58 crore, which would leave her with Rs 1.92 crore.
As per the existing rules, the petitioner has to keep 25 percent of the seized currency as deposit in RBI Bonds and the money available with banks falls short by Rs 83 lakh to utilise the scheme. The bench directed the I-T officials to treat the seized currency as tax, cess, penalty etc instead of asking her to get all this from outside while seizing her existing cash. The bench directed the petitioner to deposit Rs 83 lakh from outside to complete the RBI bond transaction.
