PMGKY - Current Affairs Questions and Answers

1)   Cooperative banks cannot accept deposits under PMGKY. Which banks can?

a. PSU banks
b. Private banks
c. Banks to which Banking Regulations Act 1949 applies
d. All of the above
Answer  Explanation 

ANSWER: Banks to which Banking Regulations Act 1949 applies

Union Government has notified that cooperative banks are not authorised to accept deposits under PMGKY.

PMGKY stands for Pradhan Mantri Garib Kalyan Yojana.

The deposits under this scheme can be accepted by any banks to which Banking Regulation Act 1949 (10 of 1949) applies.

Scheme allows assesses to disclose previously unaccounted and non-declared income under the ambit.

The PMGKDS permits voluntary declarations of previously undisclosed income with effective tax rate of 50 percent.

It requires assesses to deposit further 25% of such wealth into 4 year interest free deposit.

PMGKY: Know More

  • This is a voluntary black money declaration under the Pradhan Mantri Garib Kalyan Yojana (PMGKY).
  • Those with unaccounted cash can disclose it under PMGKY scheme by paying 50 percent tax and penalty before 31 March, 2017.
  • It is also a poverty alleviation program with proceeds of the income declaration going to the marginalised.
  • The scheme was launched on 17 December 2016. It will remain open for declarations upto 31 March 2017.

2)   Which Bill was introduced to impose higher rate of tax in undisclosed incomes?

a. Taxation Laws (Second Amendment) Bill, 2016
b. Taxation Laws (Third Amendment) Bill, 2016
c. Taxation Laws (Fourth Amendment) Bill, 2016
d. Taxation Laws (Fifth Amendment) Bill, 2016
Answer  Explanation 

ANSWER: Taxation Laws (Second Amendment) Bill, 2016

Finance Minister Arun Jaitley on 28 November 2016 introduced the Taxation Laws (Second Amendment) Bill, 2016 in the Lok Sabha.

The Bill that amends tax laws seeks to impose a higher rate of tax and penalty in respect of undisclosed incomes.

This amendment bill has proposed to tax at 50 percent the unaccounted demonetised cash that is disclosed voluntary till 30 December 2016.

It says, up to 85 percent tax and penalty will be levied on undisclosed wealth that is discovered by authorities after 30 December 2016.

The Bill proposes a Pradhan Mantri Garib Kalyan Yojana (PMGKY) 2016 wherein the unaccounted, now banned INR 500 and 1000 rupee notes, deposited in banks between 10 November and 30 December 2016, will be taxed at 30 percent plus a 10 percent penalty.

A 33 percent surcharge on the tax will take the total levy to 50 percent.

The Bill proposes to amend Section 115BBE of the Income Tax Act to provide for a steep 60 percent tax and a 25 percent surcharge on it (total 75 percent) for black money holders who choose to disclose after PMGKY ends.
The bill also inserts a new section that calls for an additional 10 percent penalty on being established that the undeclared wealth is unaccounted or black money, taking the total incidence of levies to 85 percent.