Ahead of deadline, taxmen get subtle calls

DEMONETISATION Some have started telephoning taxmen to check tax liabilities before the 2nd ‘come clean’ offer ends Dec 30

CENTRE HAD FOLLOWED UP ITS FIRST VOLUNTARY DECLARATION OFFER – FROM JUNE 1 TO SEPT 30 – BY DEMONETIZING RS 500 AND RS 1000 CURRENCY FROM NOVEMBER 8 MIDNIGHT.

Black money holders in Uttar Pradesh, who clung to unaccounted wealth after the first post demonetization disclosure deadline of September 30, have started telephoning taxmen to check tax liabilities before the Narendra Modi government’s second ‘come clean’ offer ends December 30.

Taxmen assess that the queries, mostly centered round the newly introduced disclosure incentive scheme Pradhan Mantri Garib Kalyan Yojana (PMGKY), would be followed by “big disclosures likely to pick up by the year-end.”

Modi has warned of stiff penalty and stricter measures to check black money in the New Year, reason taxmen attribute to the spurt in queries from those with undisclosed wealth. “People want to know various aspects of admitting undisclosed wealth under PMGKY. Some are also turning up with the tax consultants. The trend is encouraging,” officials say.

The centre had followed up its first voluntary declaration offer – from June 1 to September 30 – by demonetizing Rs 500 and Rs 1000 currency from November 8 midnight. On November 29, Lok Sabha approved amendments to tax laws; both on existing provisions of I-T act and one paving way for the introduction of PMGKY, which incentivises voluntary disclosure. Under PMGKY effective taxation on undisclosed income is around 55 per cent, including the 25 per cent refundable income with a four-year lock-in period. From Friday, lesser avenues would be open for using outdated cash, petrol pumps would stop accepting them, for instance. Taxmen hope this would further squeeze possibilities of black money conversion.

“The best option is to come clean on all the deposits made after November 8. Stiff penalties await those who fail to explain their deposits, big or small. If we detect suspicious transactions, even small deposits could be checked,” tax officials say. The identities of those who own up their undetected income would be kept secret.

“The mandatory secrecy clause is to save them from embarrassment. It is also to save them from looters who could target them if their names and income get public,” officials said. Those who have admitted to undisclosed wealth under Income Disclosure Scheme have been offered chance to pay their taxes in instalments till April 2017.