Bait In Black And White

Up for grabs is another offer for cash hoarders to change the colour of their money.

- Lola Nayar

Nothing will get you nothing: try again,” the famous words from King Lear appears to be Prime Minister Narendra Modi’s motto in his zeal to keep his election promise of tackling black money. Unfazed by the scathing criticism of many a noted economist against demonetisation, Modi is preparing to open another win­dow to weed out black money from the economy by proposing the third amnesty scheme in less than three years.

The latest voluntary income disclosure scheme (IDS) under the Taxation Laws (Second Amendment) Act, passed in Lok Sabha on Tuesday, has tougher provisions than the previous one, which closed on September 30, and had levied 45 per cent tax-plus-penalty. To be implemented after getting the presidential nod, the new scheme proposes nearly 50 per cent levy (including tax, surcharge and penalty) on any untaxed income disclosed. In addition, 25 per cent of black money declared by an individual is to be parked interest-free in ‘Pradhan Mantri Garib Kalyan Deposit Scheme, 2016’ for four years.

The interest-free money thus collected by the government is to be used for social development projects meant for the poor. The new carrot-and-stick approach of the government is expected to garner better response than the previous two efforts, considering the fact that the proposed law entails stiffer penalty of up to 85 per cent for those netted by tax officials.