Can you declare benami deposits under PMGKY and get immunity? CBDT may clarify this soon

The field offices of I-T department have sought a clarification from the Central Board of Direct Taxes (CBDT) on whether benami accounts can be included for disclosure under PM Garib Kalyan Yojana (PMGKY). CBDT has also been asked whether those declaring such funds can get immunity from the Benami Transactions (Prohibition) Act.

Under the PMGKY, only unaccounted cash and deposits can be disclosed before tax authorities. It is not open for other unaccounted assets.

However, the wording of the scheme says 'any deposits'. Now the question is, if this meant benami deposits too, which are funds parked at a bank in other's name. Even deposits in one's own name can remain undisclosed.

The common method is to deposit cash below Rs 50,000 in such accounts, so that the PAN need not be quoted. Not quoting PAN keeps it out of the tax scanner. Sources said there were queries during interactions with tax practitioners on whether benami deposits can also be disclosed.

This meant if X has parked the money in Y's account, a clarification was needed if X could disclose that it was his money in Y's account. At present, there is a fear that if such disclosure is made, it may lead to action under the Benami Transactions (Prohibition) Act.