This amount is just about 10% of the previous IDS
With declarations of only Rs 4,600 crore (Rs 46 billion), the much-touted Pradhan Mantri Garib Kalyan Yojana (PMGKY) has turned out to be a damp squib. This is only about 10 per cent of the previous income declaration scheme.
The total tax collections under the scheme, also known as the Income Declaration Scheme-II (IDS-II), is about Rs 2,300 crore (Rs 23 billion).
Now, the government will need to come up with more steps to fight the creation and control of undisclosed money, as part of its Operation Clean Money.
The numbers are provisional, and could be revised upwards, said a government official. Sources in the finance ministry, however, said the proceeds were “not up to the mark”.
Officials of the Central Board of Direct Taxes said they had followed due process and there were no internal targets, as this was a voluntary disclosure scheme. But, the senior political leadership did have high expectations from the scheme.
Sources said the Prime Minister’s Office had directly monitored the scheme.
It was launched after demonetisation of the old Rs 500 and Rs 1,000 notes on November 8 last year. Those with a stock of unaccounted cash in these denominations were allowed to come clean by paying 50 per cent of their untaxed wealth.
It also had a mandatory four-year lock-in of 25 per cent of the declared amount. This meant those declaring wealth under this scheme would have to part with 75 per cent of it. The scheme closed on March 31.
On the basis of provisional figures, the declarants will have to forgo Rs 1,150 crore (Rs 11.5 billion) for four years.
The tax department was regularly getting information of high-value deposits from banks between November 10 and December 30, when people were allowed to deposit scrapped notes.
Notices were issued to 1.8 million individuals; 1.2 million people had responded. “We have the data with us. Those who have not come clean under the scheme will have to face consequences,” said an official.
The investigation department of the CBDT went all out conducting searches and seizures of suspicious transactions and businesses, asking taxpayers to declare under the scheme. But not many seem to have availed of it.
“The high tax incidence was one reason that most people avoided the scheme. They would have filed returns under the normal route,” said the official.
In IDS-1, which closed on September 30 last year, tax liability was 45 per cent (including penalty and surcharge) of the declared amount. The tax had to be paid in three instalments.
The government on Monday had declared that it met the direct tax collection target for the FY17, posting a growth of 14.2 per cent, at Rs 8.47 lakh crore.
The initial total declarations under IDS-1 was Rs 65,000 crore (Rs 650 billion), but later, the valid ones were worth about Rs 55,000 crore (Rs 550 billion).
In the first two instalments, deadline for which was November 30, 2016 and March 31, 2017, respectively, the government had collected around Rs 12,800 crore (Rs 128 billion). The remaining 50 per cent needs to be paid by September 30.
Illustration: Uttam Ghosh/Rediff.com