Pay 50% tax on unaccounted deposits, or 85% if caught: Govt

November 28, 2016

New Delhi, Nov 28: Providing a window to black money holders, the government today proposed to levy a total tax, penalty and surcharge of 50 per cent on the amount deposited post demonetisation while higher taxes and stiffer penalty of up to 85 per cent await those who don't disclose but are caught.

Nearly three weeks after Prime Minister Narendra Modi announced junking high denomination 500 and 1000 rupee notes, Finance Minister Arun Jaitley introduced a bill to amend the Income Tax law which also provides for black money declarants a mandatorily depositing of 25 per cent of the amount disclosed in anti-poverty scheme without interest and a four-year lock-in period.

Those who choose to declare their ill-gotten wealth stashed till now in banned 500 and 1000 rupee notes under the Pradhan Mantri Grabi Kalyan Yojana 2016, will have to pay a tax at the rate of 30 per cent of the undisclosed income.

Additionally, a 10 per cent penalty will be levied on the undisclosed income and surcharge called PMGK Cess at the rate of 33 per cent of tax (33 per cent of 30 per cent).

Further, the declarants have to deposit 25 per cent of the undisclosed income in a scheme to be notified by the government in consultation with the Reserve Bank of India (RBI).

The money from the scheme would be used for projects in irrigation, housing, toilets, infrastructure, primary education, primary health and livelihood so that there is justice and equality, said the Statement of Objects and Reasons of the Bill.

For those who continue to hold onto undisclosed cash and are caught, existing provisions of the Income Tax law will be amended to provide for a flat 60 per cent tax plus a surcharge of 25 per cent of tax (15 per cent), which will amount a levy of 75 per cent.

Besides, if the assessing officer decides he can charge a 10 per cent penalty in addition to the 75 per cent tax.

Comments

Is this RULE applies to all depositors OR to those who deposit more than 250,000 in their accounts ... Pls clarification required ....
What is the status of a person who deposits 150,000 in his account....

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‘Pay the worker before his sweat dries’: Madras High Court cites Prophet Muhammad’s teaching while ordering settlement of dues

News Network

December 21,2025

Invoking the teachings of Prophet Muhammad—“pay the worker before his sweat dries”—the Madras High Court has directed a municipal corporation to settle long-pending legal dues owed to a former counsel. The court observed that this principle reflects basic fairness and applies equally to labour and service-related disputes.

Justice G. R. Swaminathan made the observation while hearing a petition filed by advocate P. Thirumalai, who claimed that the Madurai City Municipal Corporation failed to pay him legal fees amounting to ₹13.05 lakh. Earlier, the High Court had asked the corporation to consider his representation. However, a later order rejected a major portion of his claim, prompting the present petition.

The court allowed Thirumalai to approach the District Legal Services Authority (DLSA) and submit a list of cases in which he had appeared. It also directed the corporation to settle the verified fee bills within two months, without interest. The court noted that the petitioner had waited nearly 18 years before challenging the non-payment and that the corporation could not be fully blamed, as the fee bills were not submitted properly.

‘A Matter of Embarrassment’

Justice Swaminathan described it as a “matter of embarrassment” that the State has nearly a dozen Additional Advocate Generals. He observed that appointing too many law officers often leads to unnecessary allocation of work and frequent adjournments, as government counsel claim that senior officers are engaged elsewhere.

He expressed hope that such practices would end at least in the Madurai Bench of the High Court and added that Additional Advocate Generals should “turn a new leaf” from 2026 onwards.

‘Scandalously High Amounts’

While stating that the court cannot examine the exact fees paid to senior counsel or law officers, Justice Swaminathan stressed that good governance requires public funds to be used prudently. He expressed concern over the “scandalously high amounts” paid by government and quasi-government bodies to a few favoured law officers.

In contrast, the court noted that Thirumalai’s total claim was “a pittance” considering the large number of cases he had handled.

Background

Thirumalai served as the standing counsel for the Madurai City Municipal Corporation for more than 14 years, from 1992 to 2006. During this period, he represented the corporation in about 818 cases before the Madurai District Courts.

As the former counsel was unable to hire a clerk to obtain certified copies of judgments in all 818 cases, the court directed the District Legal Services Authority to collect the certified copies within two months. The court further ordered the corporation to bear the cost incurred by the DLSA and deduct that amount from the final settlement payable to the petitioner.

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