NEW DELHI: There was unusual rush at income tax offices in the capital on Tuesday, soon after a bill was passed by Lok Sabha clearing amendments to the Income Tax (I-T) Act which proposed enhanced tax liability of 82.5% of the total unaccounted amount.The anxiety is easy to understand. For, the proposed amendments shut out one attractive option that holders of undeclared income had — of declaring the cash with them as income for the year and get away by paying 35.5% of tax. That most of the declarations under the Income Disclosure Scheme (IDS), which closed in September, were about assets rather than cash only enhanced the appeal of the option which will be extinguished when the amendments enter the statute book. Not surprisingly, the last few days have seen many turning up at I-T offices across the country to persuade tax officials to let their hitherto undeclared income be included among their declaration under the IDS.The tax department, it is learnt, refused to entertain such requests. The amendments passed on Tuesday will shut out the room for the exercise of discretion . According to a chartered accountant, one among the several bookkeepers who had been queuing up at the I-T office in the wake of the demonetisation decision on November 8, people did not declare their cash under IDS because they did not suspect that the government could change the I-T Act immediately after closure of the IDS.As cash is a movable asset, holders have the leeway to declare the undeclared amount as windfall income in the current financial year, said chartered accountant Vivek Jain when approached by TOI to explain why the amendments might not be welcomed by those with undeclared cash. Disclosure of unaccounted income, under Section 115BBE of the unamended I-T Act, as sudden surge income during the year would have invited a flat tax rate of 30%. With cess and surcharge, the total liability would have come to a maximum of 35.54% of the total disclosed amount.In fact, Jain said many hoarders of cash, clueless about PM Modi’s November 8 bombshell, had planned to pay advance tax in December on their hoard. Even after being forced by demonetisation to bring out their cash, they had hoped to get away by paying 35.5%. The amendments have put paid to the plan. For, the changes in Section 115BBE of I-T Act for such disclosure of cash would now invite a total tax of 82.5% — a flat tax of 60% in addition to surcharge of 25% of tax i.e. 15% of such income. So, the total tax on such cash disclosure would be 75%.In addition, the new amendment, according to the press statement issued by the government, provides for a penalty of 10% of this 75% tax. Thus, the total tax outgo would be 82.5%. As the window of Section 115BBE has now become hugely punishing, the only option available to hoarders of black money is to opt for the PM’s ‘Garib Kalyan Yojana’, under which a flat 49.9% tax is paid upfront and 25% of all such deposits go into the PM’s welfare fund for the poor. In case the hoarders try to under-report or misreport, their tax liability will go up to 50.54% and 95.54% respectively, if caught in assessment.The penalty on uncovered income also increased to upward of 60.90% up to 95.54% from 40.9% earlier.