Newsflash On The New Taxation Window To Declare Undisclosed Income In The Form of Cash Deposits

1. With effect from 9th November, 2016, bank notes of existing series of denomination of the value of Rs. 500 and Rs. 1000 ceased to be legal tender as part of the monetization plan of the government directed to curb black money in the economy. However, concerns were raised that the existing provisions of Income-tax Act, 1961 (‘IT Act’) does not provide for stringent provisions to tax and penalize undisclosed income in the form of cash deposits.
2. In this backdrop, the government has proposed a scheme called - ‘Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016’ (PMGKY) as Chapter IX A of the Finance Act 2016. The purchase of the PMGKY scheme is to provide a new window for taxpayers to declare and pay tax on undisclosed cash deposits in the form of income for the period upto Financial year 2015-16.
3. Further, amendment has also been proposed in the Income Tax Act by way of Taxation Laws (Second Amendment) Bill, 2016 (‘the Bill’) to provide for tax treatment of undisclosed income primarily resulting from the monetization drive. The bill has been passed by the Lok Sabha on 29 November 2016.
4. The purpose of this newsflash is to highlights the significant changes proposed in / brought by way of:

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