REFUND CLAIMS CAN'T BE USED FOR TAXES UNDER BLACK MONEY SCHEME

Unlike its first variant, the second edition of the government' s hidden income disclosure scheme, the Pr ad han Man triG ari bK al ya nYoj ana (PM G KY ), will not allow dec la rants to use claims made for refunds for advance taxes paid, tax deducted at source and tax collected under thescheme.

This was stated on Wednesday in answers to a second set of 'Frequently Asked Questions' on the scheme, issued by the Central Board of Direct Taxes( CB D T ).

PM G KY has a tax incidence of 50 percent, including the penalty. And, a four-year lock-in of a quarter of the disclosure amount. The scheme allowed payment using old currency note still December 30, even as the window is open till March 31.

Individuals who have deposited cash from November 8( when demo net is at ion was announced) may goto their bank and fill the proforma regarding the 50 percent tax and deposit of 25 percent. Then, attach this and the deposit receipt with the income declaration form, sent to the income tax department.

Amounts deposited or re paid against an overdraft account, cash credit account or any loan account maintained with a bank or any specified entity are eligible for being declared under the scheme.

It was announced after the November 8 decision. The window openedonDecember17.

Only unaccounted domestic cash holding maybe declared through it and not jewellery, stocks, immovable property or accounts abroad. Under IDS -1, one was allowed to declare undisclosed assets, including jewellery and property.

On the issue of a person against who ma search and survey operation has been initiated, CB D Ts aid such a person was still eligible to file a declaration under the scheme.

Not declaring hidden money under the scheme now but showing it as income in the tax return form would lead to a total levy of 77.25 per cent in taxes and penalty. If the disclosure is not made in the return, too, a further 10 percent penalty on tax will be levied, followed by prosecution. The disclosure scheme is part of The Taxation Laws( Second Amendment) Act, approved by the Lo kS ab ha on November 30 and receiving the President' s formal as sent last month.

CBDT further said :" Undisclosed income represented in the form of deposits in a foreign bank account is not eligible for the scheme ." A disclosure window was provided earlier for hidden money or assets abroad, which closed in September 2015.