Recent Provisions for Taxation & Penalty on Unexplained Credit, Investment, Cash and Other Assets

1. Recent Provisions for Taxation & Penalty on
Unexplained Credit, Investment, Cash and Other
Assets

2. S.No. Particulars
Declared under Pradhan Mantri
Garib Kalyan Yojana
Voluntary Declared under
Return Filing
1 Applicability
Undisclosed Income in the form of Cash or
deposits in an account maintained by the
person with following specified entity
All Unexplained Cash, Credit,
Investment, Cash and Other Assets
2 Tax @ 30% of Undisclosed Income
60% of Unexplained cash, credit,
Investment, Cash and Other Assets u/s
115 BBE
3 Surcharge @ 33% of Tax i.e. 9.9% 25% of Tax i.e. 15%
4 Cess @ N.A. 3% OF Tax & Surcharge i.e. 2.25%
5 Penalty@ 10% of Undisclosed Income No Penalty u/s 271AAC
6
Total
Tax+Surcharge+Cess+Penalty
49.90% 77.25%
7 Deposit
25% of declared income to be deposited in
Interest Free Deposit Scheme for 4 years
N.A.
8 Prosecution Proceedings No Prosecution Proceedings
No Prosecution Proceedings and no
penalty will be levied for under
reporting and mis-reporting of income
9 Penalty u/s 271AAB No Penalty levied No Penalty levied
10
Example
Undisclosed Income is Rs. 10 lakh,
So, Tax will be Rs. 3 lakh and Surcharge of
Rs. 99000 and Penalty will be Rs. 100000
Total is Rs. 499000 which is 49.9% of
undisclosed income.
Rs 2.5 lakh will be locked in for 4 years
without accruing any interest.
Undisclosed Income is Rs. 10 lakh,
So, Tax will be Rs. 6 lakh and Surcharge
of Rs. 1.5 lakh, Cess of Rs.22500 and
Penalty will be NIL.
Total is Rs. 772500 which is 77.25% of
undisclosed income.
11 Total Liability 49.90% 77.25%

3. S.No. Particulars
Not Declared by Assessee in Return of Income But
Determined by AO
1 Applicability
Undisclosed Income in the form of Cash or deposits in an account
maintained by the person with following specified entity
2 Tax @ 60% of Undisclosed Income u/s 115 BBE
3 Surcharge @ 25% of Tax i.e. 15%
4 Cess @ 3% OF Tax & Surcharge i.e. 2.25%
5 Penalty@ 10% on tax i.e 6% of Undisclosed Income u/s 271AAC
6 Total Tax+Surcharge+Cess+Penalty 83.25%
7 Deposit N.A.
8 Prosecution Proceedings No Prosecution Proceedings
9 Penalty u/s 271AAB No Penalty levied
10
Example
Undisclosed Income is Rs. 10 lakh,
So, Tax will be Rs. 6 lakh and Surcharge of Rs. 1.5 lakh, Cess of
Rs.22500 and Penalty will be Rs 60000.
Total is Rs. 832500 which is 83.25% of undisclosed income.
11 Total Liability 83.25%

4. S.No. Particulars Not declared but Search & Seizure held
1 Applicability All Unexplained Cash, Credit, Investment, Cash and Other Assets
2 Tax @ 60% of Undisclosed Income u/s 115 BBE
3 Surcharge @ 25% of Tax i.e. 15%
4 Cess @ 3% OF Tax & Surcharge i.e. 2.25%
5 Penalty@ No Penalty u/s 271AAC
6
Total
Tax+Surcharge+Cess+Penalty
77.25%
7 Deposit N.A.
8 Prosecution Proceedings Prosecution Proceedings will be there
9 Penalty u/s 271AAB Penalty LEVIED
Found during a Raid
Person Admits Tax Evasion At the time
of Raid
Does Not Admits at the time of
Raid
Penalty @ 30% of Income will be levied
Penalty @ 60% of Income will be
levied
10
Example
Undisclosed Income is Rs. 10 lakh,
So, Tax will be Rs. 6 lakh and
Surcharge of Rs. 1.5 lakh, Cess of
Rs.22500 and Penalty u/s 271AAB of Rs.
3 lakh.
Total is Rs.1072500 which is 107.25%
of undisclosed income.
Undisclosed Income is Rs. 10 lakh,
So, Tax will be Rs. 6 lakh and
Surcharge of Rs. 1.5 lakh, Cess of
Rs.22500 and Penalty u/s 271AAB
of Rs. 6 lakh.
Total is Rs.1372500 which is
137.25% of undisclosed income.
11 Total Liability 107.25% 137.25%

5. An Effort By:
CA Kirti Fatehpuria
Ramanand Goyal & Co.
Chartered Accountants
+919602796993
mail@rngca.com
www.rngca.com