Lok Sabha passes Taxation Laws (Second Amendment) Bill, 2016
The Lok Sabha has passed the
Taxation Laws (Second Amendment) Bill, 2016 to amend the Income Tax Act, 1961
and Finance Act, 2016 on 29 November 2016. The Bill was introduced in Lok Sabha
on 28 November 2016.
- It imposes a higher rate of tax and penalty in
respect of undisclosed incomes.
- The Bill proposes to introduce the Pradhan Mantri
Garib Kalyan (PMGK) Yojana, 2016.
Details:
The new Taxation Laws (2nd
Amendment) Bill 2016, passed sans debate in the Lok Sabha on Tuesday, will
entail a tax of 30 per cent of the income declared, an additional surcharge of
33 per cent of the tax amount, and a penalty of 10 per cent of the declared
income.
- This adds up to a total liability of about 50 per
cent. In addition, the amendment states that 25 per cent of the declared
income is to be deposited in an interest-free deposit scheme with a
lock-in of four years.
If undeclared, then the
unexplained amount will face a flat tax of 60 per cent, a surcharge of 25 per
cent of the tax amount, and a possible 10 per cent penalty at the discretion of
the assessing officer. This takes the total levy on undeclared income or assets
to as much as 85 per cent.
