Demonetisation Tax Sword - Will the final weapon work ?
In an ostensible attempt to curb the black money menace, the Modi Government, in a stunning move on November 8, announced demonetisation of currency notes of Rs. 500 and Rs. 1000 denominations.As with most black swan events we are in unchartered territory; there have already been more twists and turns than an Alfred Hitchcock thriller! With millions of citizens depositing the now illegal tender notes to the tune of almost Rs. 9 lac crores in a mere 20 days, the Finance Ministry probably had no option but to step in.
So here we are - another IDS but with a different name - Pradhan Mantri Garib Kalpana Yojana, which gives another final chance to tax evaders but this time at a rate higher than the 45% IDS rate and also a 4 years lock in of 25% of the amount declared under the scheme. And for those who are willing to brazen it out, the tax department is armed with a strengthened/amended Sec. 115BBE.
Did the Government have no choice but to go for ankther IDS? Will the fear of law force tax evaders to come clean this time? Will the amendments to Income tax Act be an adequate deterrent for black money holders or will it only results in unintended harassment of ordinary citizens ?