Government allows use of old notes for tax payment under PMGKY

The Union Finance Ministry has allowed use of old bank notes of 500 and 1,000 rupees for payment towards tax, surcharge, penalty and deposit under the Pradhan Mantri Garib Kalyan Yojana (PMGKY) till 30 December 2016. The payment in old notes is to be made through challan and the deposits are to be made in the scheme. The PMGKY permits voluntary declarations of previously undisclosed income with an effective tax rate of 50% and requires assessees to deposit a further 25% of such wealth into a four-year interest-free deposit. The scheme allows assessees to disclose previously unaccounted and undeclared income under its ambit. It started on 17 December 2016 and is open for declarations upto 31 March, 2017.