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Pradhan Mantri Garib Kalyan Deposit Scheme, 2016

As mentioned in my blog post PMGKY Taxation Laws Amendment To Really Hurt The Tax Defaulters, the Govt. has recently introduced the 'Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016'. 

The objective of the scheme is to encourage tax defaulters, to convert their #blackmoney into white, by declaring their undisclosed income. The PMGKY Scheme stipulates that while doing so, the declarant will have to 
(a) pay a total tax of almost 50% of the undisclosed income
(b) deposit 25% of the undisclosed amount declared with the Govt.
(c) while retaining the balance 25% amount.

The idea is to raise additional revenue for the welfare programmes, for the disadvantaged and the poor section of our society.

Accordingly, the Reserve Bank of India has now announced the operational guidelines for deposit of this 25% sum of money.

This black money deposit scheme has been designated as the Pradhan Mantri Garib Kalyan Deposit Scheme (PMGKDS), 2016.

Enumerated below are the key features of the same:

1. Eligibility
This scheme covers the deposit made by a person, declaring undisclosed income, under the Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016.

2. Dates for making the Deposit
The deposit can be made during the period Dec 17, 2016 to Mar 31, 2017.

3. Form of Deposit
The above deposit would be held in the form of credit to the declarant in the Bond Ledger Account with RBI. Accordingly, a Certificate of Holding would be issued to the depositor.

4. Where to Deposit
All banks (covered under Banking Regulation Act, 1949) are authorized to receive such deposits. The Department of Revenue, Ministry of Finance will verify the details, before the declaration is finally accepted.

5. Amount
The amount deposited shall not be less than twenty-five per cent of the undisclosed income declared under PMGKY.

6. Mode of payment
Entire amount must be deposited in a single payment  (in multiples of rupees one hundred) in the form of cash, or demand draft / cheque drawn in favour of the authorised bank accepting such deposit, or by electronic transfer. [UPDATE: You are now permitted to deposit the amount on one or more occasions.]

7. Effective date
Date of tender of cash, or the date of realisation of draft / cheque or transfer through the electronic mode would be considered as the date of deposit.

8. KYC requirement
The declarant has to give his Full Name, Address, Permanent Account Number and Bank Account details (for receiving redemption proceeds).

(Note: If PAN is not available, the depositor has to apply for the same, and provide the details of such PAN application along with the acknowledgement number).

9. Interest
No interest is payable on these deposits under PMGKDS.

10. Tenure
The deposit amount shall be redeemed after 4 years.

11. Nomination
Facility is available to nominate person(s) entitled to receive the payment, in the event of the death of the declarant.

12. Non-traded
Deposit under PMGKDS is not tradeable.

13. Non-transferable
The deposit is NOT transferable (except to the nominee or legal heir, in the event of the death of the declarant).

14. Premature Redemption
The deposit cannot be redeemed before 4 years are complete.

15. Confidentiality
The details of the deposit shall be kept confidential by the recipient banks.

This, in a nutshell, is how the tax evaders can deposit, 25% of their declared undisclosed income, in the Pradhan Mantri Garib Kalyan Deposit Scheme (PMGKDS), 2016.

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