Pradhan Mantri Garib Kalyan Yojana was launched by the Indian government in 2016 wherein income taxpayers are given the opportunity to forgo prosecution by declaring their illegal money and paying 50% penalty on their unaccounted incomes.
Declarants of undisclosed income need to pay 30% tax, 10% penalty and 33% Pradhan Mantri Garib Kalyan Cess on the tax, all of which add up to around 50%.
Declarants must also make a mandatory deposit of 25% of undisclosed income in the zero-interest Pradhan Mantri Garib Kalyan Deposit Scheme, 2016 with a lock-in period of 4 years.
The income declared under it will not be included in the total income of the declarant under the Income-tax (IT) Act for any assessment year.
Declarations made under it will be kept confidential and shall not be admissible as evidence under any Act (ex. Wealth-tax Act, Central Excise Act, Companies Act etc). However, declarants will have no immunity under Criminal Acts mentioned in section 199-O of the Scheme.
Non declaration of undisclosed cash or deposit in accounts under this Scheme will render tax, surcharge and cess totalling to 77.25% of such income, if declared in the return of income.
In case the same is not shown in the return of income a further penalty @10% of tax shall also be levied followed by prosecution.
