Pradhan Mantri Garib Kalyan Yojana (PMGKY)

Pradhan Mantri Garib Kalyan Yojana (PMGKY): All you need to know

The preamble of the Indian constitution states that the country is a democratic republic that works for the welfare of its people. In view of the preamble, the government has been launching schemes and programs for the betterment of citizens. Pradhan Mantri Garib Kalyan Yojana is one such scheme that was launched in the year 2016.

The scheme aims at providing an opportunity for people to declare their black money in a confidential manner. For more details on the meaning of scheme and its features read through the article.

What is Pradhan Mantri Garib Kalyan Yojana?

The Modi’s government from day one has been fighting against corruption and black money. The PM has undertaken multiple steps to ensure black money is erased in India. One such scheme that aims at reduction of black money in India is PMGKY. Under the said scheme the government has been providing an opportunity to all people to declare their undisclosed income or money.

Undisclosed income is called black money as a person doesn’t pay taxes on such income. But to encourage people to disclose the money so hidden the government has introduced PMGKY. With the help of the scheme, any person can declare his assets and income confidential. The rules for disclosing and other conditions will be explained in the latter part of the article.

What is the scope of the PMGKY scheme?

The scope of the PMGKY scheme is pretty simple. It aims at abolishing the gap created between the rich and the poor. After demonetization, the Indian government provided an opportunity for people to declare undisclosed income. The income can be in the form of cash and deposits in specified entities. The main and important motive behind the launch of the scheme is helping the poor.

What is the time limit for making a declaration under the scheme?

The PM Garib Kalyan Yojana was introduced in the month of December 2016. The initial validity of the scheme was up to 1ST or before April of 2017. But in the present situation, the government of India has decided to extend the validity of the scheme up to 2020. The main reason for the increase in the validity of the scheme is COVID pandemic.

The Coronavirus spread in India has weakened the economy in terms of money. Today the entire world is unstable and everyone needs support in terms of moral and financial. Taking this into consideration the Indian government has decided to extend the scheme. The scheme is providing an opportunity for people to come clean of their income. The income so generated through declaration can be used by the government for helping the poor.

What are the eligibility criteria for making a declaration?

As per the rules and regulations of the Garib Kalyan Yojana there are criteria for declaration. Any individual can come forward and make a declaration of undisclosed income. The income so declared can be in the form of cash or deposit in specified entities.

Meaning of the word specified entities in the scheme

The word specified entities play an important role in making the declaration. PM Garib Kalyan Yojana clearly states that the cash or deposits in specified entities are not eligible under the scheme. But here arises confusion as to what is the meaning of specified entities.

The word specified entities mentioned in the scheme includes below-mentioned entities-

  1. Reserve Bank of India
  2. Banks  of India
  3. Post offices of India
  4. And any other entity as and when notified on the behalf of the scheme.

The person making a declaration of undisclosed income must understand the word specified entity. So the cash and deposits only in the above-mentioned entity are considered by the scheme.

Where to find the form for filling under PMGKY scheme?

Pradhan Mantri Garib Kalyan Yojana forms for declaring undisclosed income was available online. The form was for the scheme in 2016 for promoting declaration of undisclosed income. The declarant had to fill in forms under the scheme.

  • Form 1 – This form is used for declaring the amount held by the person. The amount so declared is in cash or deposit maintained at the specified entities.
  • Form 2 – It is an acknowledgement issued to the declarant by the jurisdiction of principal commissioner

The availability of PMGKY online apply format has made it easy for the declarant to disclose the income. The online type of application form is very convenient and comfortable irrespective of the scheme.

Four important rules for PMGKY scheme

As repeatedly mentioned previously PM Kalyan Yojana provides a unique opportunity to the people. It enables a person to disclose undeclared income. But this offer is subjected to certain conditions. A person declaring the income of undisclosed nature must follow 4 rules.

The important four rules for declaring undisclosed income under the scheme are as follows:

  1. PM Garib Kalyan Yojana will allow a person to deposit previously untaxed amount only after paying a fine. Yes, the government of India will collect a fine of 50 per cent of the total amount as a fine for failing to previously disclose the amount.

On paying the fine and making a declaration the person will be allowed to make deposits under the scheme. The penalties levied by the government also include 33 per cent of the taxed amount as cess.

  1. The second important rule of Garib Kalyan Yojana of 2016 is that the declarant has to make a deposit under the scheme. Yes, a deposit of 25 percent of undisclosed income must be made under PMGKY. The deposit scheme will be as such notified by the RBI.
  1. Refusing to make deposits under the government scheme will attract penalties. If any person declaring the income refuses government deposits, then 85% will be collected. The amounts so collected are towards taxes and penalties.
  1. The last rule as issued by the government is fine on money found. In case the government finds undisclosed money during a raid a fine is levied. A fine of nearly 90 per cent is taken out by the government in the form of taxes and penalties. After the penalties, the person is left with only 10 per cent of the amount.

The above mentioned four points are very important information. This rule needs to be known by all who is planning to make a declaration under PMGKY scheme.

Who are not eligible to make a declaration under the scheme?

The following persons are not eligible for making a declaration by filing PMGKY form. The form is filled for declaring undisclosed income under the scheme.

A. Any individual against whom an order of detention is issued. The order must be under Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974.

B. An offence punishable under the following laws:

  • Under chapter 9 or 17 of IPC
  • Narcotic Drugs and Psychotropic Substance Act, 1985
  • Unlawful activities ( prevention) Act, 1967
  • Prevention of Corruption Act
  • Benami Act and PMLA, 2002

C. Any individual notified under section 3 of the special court Act, 1992. This act relates to a trail of offences relating to transactions in securities.

D. Finally, any person who has committed any offence of undisclosed foreign income. The undisclosed assets are also included under this offence. Such money or assets must be chargeable to tax under Black money (UFIA) and the imposition of Tax Act, 2015.

Why was PMGKY extended in 2020 by the PM?

Due to the ongoing economic and social crisis of the country PM has extended the Pradhan Mantri Garib Yojana scheme. The current situation of the country is due to Coronavirus Pandemic. In one of the addresses of the PM to the nation, he announced a relief package. The PM stated that the government is taking steps and measures to fight the ongoing crisis. One such relief fund announced by the centre is under PM Garib Kalyan Yojana of 1.75 lakhs crores.

What is the scope of the PMGKY of 2020?

The aim of announcing the package under the PMGKY scheme is the betterment of the lives of the poor people. The package aims at helping the industry sector of the India economy. PM clearly stated that the scheme will mainly focus on land, labor and liquidity and law. The said scheme also aims at helping laborers, small business and mainly farmers.

What are the features of PMGKY of 2020 to fight COVID-19?

The main features of the Pradhan Mantri Garib Kalyan Yojana are as follows:

It provides Insurance for health workers

The most vital feature of the PMGKY scheme is to provide insurance coverage for specified persons. Here the specified people covered under the insurance scheme are health workers.

Asha workers, nurses, doctors, pandemics and individuals working on the frontline will receive medical insurance. The insurance cover is said to be worth 50 lakhs.

It provides relief to construction workers

The next important step taken by the government under the scheme is providing relief to construction workers. Building and construction workers will be given monetary relief from 31,000 crore funds. This fund is released by the central to state governments.

Food relief under the package

Basic needs for living a happy life is food, shelter and clothes. The pandemic affected the livelihood of millions of peoples in India. This resulted in suffering for lack of food. So the government under PM Kalyan Yojana is providing 5 kgs of wheat or rice for free. In addition to this 1 kg of pulses will also be given to every household.

Direct debit transfer

One other step taken by the government to ease the difficulty caused by the pandemic is DDT. Under this provision of the scheme, the government is planning for cash transfers. Yes, a sum of money will be directly transferred into the account of the individuals.

Cash transfer is provided by the government to households, women, and women under Jan Dhan Yojana, Divyany, poor pensioners, windows, MNREGA workers and farmers.

Amendment to EPFO

The most important step taken by the government under the PM Kalyan Yojana is an amendment to EPFO. As per the new changes, organized sector workers can remove money from the non-refundable advances. The amount withdrawn from the account must be equal to 3 months of salary or 75% of available income. Out of the two options, as per rules, the lowest will apply.


Q1: Does a person need to enrol under the scheme?

Ans: The most common question among people is for getting the benefits of the scheme do we need to enrol. No, a person need not enrol for gaining the benefits of the scheme and package.

Q2: As per the scheme will the expenses incur for treatment covered?

Ans: No, the scheme doesn’t cover any expenses incurred for the treatment of COVID-19. Nor does it cover the expenses made due to quarantine.

Bottom Line

With this, the article of PMGKY is concluded. The scheme was re-launched by the government for the economic and financial betterment of the poor in 2020. But the initial launch of the scheme aimed at reducing black money. Either way, PM Garib Kalyan Yojana is one of the best available schemes in India.

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