Circular No.2 of 2017
F.No.142/33/2016-TPL(Part)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
(TPL Division)
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Dated: 18th of January, 2017
Clarifications on the Taxation and Investment Regime for Pradhan Mantri Garib
Kalyan Yojana, 2016
The Taxation and Investment Regime for Pradhan Mantri Garib Kalyan
Yojana, 2016 (hereinafter `the Scheme') provides an opportunity to persons having
undisclosed income in the form of cash or deposit in an account maintained with a
specified entity to declare such income and pay tax, surcharge and penalty totaling
in all to 49.9 per cent. of such declared income and make a mandatory deposit of not
less than 25% of such income in the Pradhan Mantri Garib Kalyan Deposit Scheme,
2016.The Scheme has commenced on 17.12.2016 and shall remain open for
declarations/deposit upto 31.03.2017.
Queries have been received from the stakeholders seeking further clarity on
certain provisions of the Scheme. The Central Government has considered the
queries and decided to clarify the same in the form of questions and answers as
follows.-
Question No.1: Whether the amounts deposited in an account maintained with
a bank or post office like Saving account, Current Account,
Recurring Deposit Account, Fixed Deposit Account, PPF
Account, Senior Citizen Saving Scheme Account, Monthly
Income Scheme Account, Jan Dhan Yojana Account are eligible
for being declared in the Scheme?
Answer: As per section 199C(1) of the Scheme, a person can make
declaration in respect of any income in the form of deposit in an
account maintained by the person with a specified entity and as
per Explanation to section 199C(2) the banks and post offices
come under the definition of specified entity. Hence, the
undisclosed income deposited in the accounts specified above
can be declared under the Scheme.
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Question No.2: Whether declaration under the Scheme can be made in respect of
income which is represented in the form of investment in any
asset like jewellery, stock or immovable property?
Answer: No. Under the Scheme, only income represented in the form of
cash or deposit in an account maintained with specified entity
can be declared. The Scheme is hence not available for
declaration of an income which is represented in the form of
assets like jewellery, stock or immovable property.
Question No.3: In case a deposit is made by interbank transfer i.e. transfers
from one account to another account, whether such deposit can
be declared under the Scheme?
Answer: Yes, a declaration under the Scheme can be filed in respect of
deposits made in an account maintained with a specified entity
by any mode such as cash, cheque, RTGS, NEFT, or any
electronic transfer system.
Question No.4: Where a notice under section 142(1)/ 143(2)/ 148/ 153A/ 153C of
the Income-tax Act has been issued to a person for an
assessment year, will such person be eligible for making a
declaration under the Scheme?
Answer: Yes, such person is eligible to avail the Scheme subject to
fulfilment of conditions specified in the Scheme.
Question No.5: Can a person against whom a search/ survey operation has been
initiated, file declaration under the Scheme and whether the
cash seized during search operation can be declared under the
Scheme?
Answer: Yes, a person against whom a search/survey operation has been
initiated is eligible to file declaration under the Scheme in
respect of undisclosed income represented in the form of cash or
deposit in an account maintained with specified entity.
Question No.6: Whether credit of advance tax paid, tax deducted at source
(TDS), tax collected at source (TCS), in respect of an income
declared under the Scheme would be available?
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Answer: No credit for advance tax paid, TDS or TCS shall be allowed
under the Scheme.
Question No.7: Whether undisclosed income represented in the form of deposits
in foreign bank account is eligible for the Scheme?
Answer: Clause (d) of section 199-O of the Scheme provides that the
Scheme shall not apply in relation to any undisclosed foreign
income and asset which is chargeable to tax under the Black
Money (Undisclosed Foreign Income and Assets) and
Imposition of Tax Act, 2015. Hence, undisclosed income
represented in the form of deposits in foreign bank account is
not eligible for the Scheme.
Question No.8: Can a person come under the Scheme with respect to deposit
made in a bank account prior to the Financial Year 2016-17?
Answer: A person can avail the Scheme for any assessment year
commencing on or before the 1st day of April, 2017. Hence,
deposits made in bank account prior to financial year 2016-17
can also be declared under the Scheme.
Question No.9: If a person does not declare undisclosed cash deposited in an
account between 01.04.2016 to 15.12.2016 under the Scheme, then
whether such undisclosed deposit shall attract tax at the rate
provided in the Taxation Laws (Second Amendment) Act, 2016?
Answer: The amended provisions of section 115BBE of the Income-tax
Act, 1961 shall apply to A.Y.2017-18, relating to F.Y. 2016-17.
Hence, undisclosed deposits between 01.04.2016 to 15.12.2016
shall also attract tax at the rate provided in the Taxation Laws
(Second Amendment) Act, 2016.
Question No.10: Whether undisclosed income deposited/repaid in an Overdraft
Account or Cash Credit Account or any loan account
maintained with a bank is eligible for being declared under the
Scheme?
Answer: Yes, the amount deposited or repaid against an overdraft
account/cash credit account/any loan account maintained with
a bank or any specified entity is eligible for being declared
under the Scheme.
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Question No.11: Whether the cash seized during a search and seizure action of
the Department and deposited in Public Deposit Account is
allowed to be adjusted against the payments required to be
made under the Scheme?
Answer: The adjustment of cash seized by the Department and deposited
in the Public Deposit Account may be allowed to be adjusted for
making payment of tax, surcharge and penalty under the
Scheme on the request of the person from whom the cash is
seized. However, the said amount shall not be allowed to be
adjusted for making deposits under the Pradhan Mantri Garib
Kalyan Deposit Scheme.
Question No.12: Person `A' made an advance in cash for procurement of goods
(other than immovable property) or services to person `B'.
Person `B' deposits this amount in his bank account. Person `B'
subsequently returns this amount to person `A' in cash or
through digital means as the purpose for which advance was
made did not materialise. Can person `A' declare this amount
under the Scheme? Whether penalty under section 271D or 271E
shall be attracted in the case of person `B'?
Answer: Yes, person `A' is eligible to declare the said amount under the
Scheme. Since the advance was made for procurement of goods
(other than immovable property) or services, no penalty under
section 271D or 271E of the Act shall be attracted in respect of
the said transactions.
(Dr. T.S. Mapwal)
Under Secretary to the Government of India
Copy to:-
1. PS to FM/ OSD to FM/ OSD to MoS(R).
2. PS to Secretary (Revenue).
3. The Chairman, Members and all other officers in CBDT of the rank of Under
Secretary and above.
4. All Pr. Chief Commissioners/ Pr. Director General of Income-tax with a
request to circulate amongst all officers in their regions/ charges.
5. Pr. DGIT (Systems)/ Pr. DGIT (Vigilance)/ Pr. DGIT (Admn.)/ Pr. DG
(NADT)/ Pr. DGIT (L&R).
6. CIT (M&TP), CBDT.
7. Web manager for posting on the departmental website.
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