Lok Sabha passes the Taxation Laws (Second Amendment) Bill 2016

Arun Jaitley said that the government moved the amendment after it saw that few were still trying to convert their black money into white.

The Lok Sabha on Tuesday passed the Taxation Laws (Second Amendment) Bill2016 which levies a tax of 50 per cent on the amount deposited post demonetisation.

The bill was apparently proposed to provide a window to the black money holders to legalise their wealth. As per the amendment, 85 percent tax penalty will be levied on people depositing their undisclosed wealth after 30 December.

Backing the move, Finance Minister Arun Jaitley asserted that the government moved amendments in the Income-tax laws after noticing that a lot of people had been desperately trying to convert their black money into white after demonetisation of higher denomination currency notes.

“The Prime Minister made a massive announcement on 8 November to fight the tackle the issue of black money and corruption in our country: The Central government proposed amendments to the Taxation Law after it witnessed that a few people were still trying to convert black money into white post demonetisation,” Arun Jaitley said in Lok Sabha.

Arun Jaitley introduced the Taxation Laws (Second Amendment) Bill, 2016, on Monday in the Lok Sabha almost weeks after Prime Minister Narendra Modi made the announcement of demonetising Rs 500 and Rs 1000 notes.

The Income Tax law also makes it mandatory for the black money declarants to deposit 25 per cent of the amount disclosed in an anti-poverty scheme without zero-interest and a four-year lock-in period.

Also,  a tax at the rate of 30 per cent will be levied on the people who choose to declare their unaccounted income in now banned 500 and 1000 rupee notes under the Pradhan Mantri Grabi Kalyan Yojana 2016.