The Lok Sabha on November 30th 2016 passed the Taxation Laws (second) Amendment Bill, which provides another chance for people with unaccounted cash to come clean. The Taxation Laws (Second Amendment) Bill, 2016 was passed by a voice vote in a complete din without any debate. The amended law provides those with unaccounted cash or deposits of cancelled Rs 500 and Rs 1,000 notes to pay 50% tax and come clean, or else, if caught, face a much harsher penalty and possible prosecution.
A quarter of the amount declared will be locked up for four years in interest free deposits, leaving such declarant with only 25% of funds for immediate use. Under the Pradhan Mantri Garib Kalyan Yojana, 2016 (PMGKY), blackmoney declarants have to mandatorily park 25 per cent of that wealth in zero-interest, four-year-no-withdrawal scheme.
The law also provides for imposing up to 60% (tax + penalty) — if it’s admitted and return is filed — and 90% (tax + penalty) on cash seized in searches. Opposition members said the bill could not be discussed before the debate on demonetisation as the measure was a follow-up of the note ban decision.
— Press Trust of India (@PTI_News) December 16, 2016
Although this bill was passed as a law in Lok Sabha without a debate, the bill never saw light in Rajya Sabha due to the ongoing ruckus created by Opposition parties. The Taxation Laws (second) Amendment Bill has now been given an assent by President Pranab Mukherjee. This gives the Government a clear go ahead to implement their pro poor schemes.