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Reactions poured in from analysts after <a href="http://www.businessinsider.in/Arun-Jaitley-proposes-amendments-in-I-T-Act-30-tax-10-penalty-to-be-slapped-on-undisclosed-income/articleshow/55665871.cms">the government today proposed to tax the unaccounted demonetised cash at 50 per cent </a>that is disclosed voluntarily till December 30, post which a steep up to 85 per cent tax and penalty will be levied on undisclosed wealth that is discovered by authorities. 
 <keyword id="3043919" type="UNKNOWN" weightage="20" keywordseo="Vikram-Babbar">Vikram Babbar</keyword>, Executive Director of Fraud Investigation &amp; Dispute Services at <keyword id="1919178" type="UNKNOWN" weightage="20" keywordseo="EY-India">EY India</keyword> said - “The success of the new amendment introduced by the Government would depend upon the efficacy of the implementation and close monitoring." 
 
"While the penalty for voluntary non-disclosure definitely seems appropriate and is necessary, the Government would have to lay down monitoring mechanism for identification of such non-disclosure. Use of advanced techniques like Analytics, including areas like link analysis, social profiling &amp; patterns and fuzzy matching as compared to traditional methods could lead to a better outcome," he added. 
 Meanwhile, Girish Vanvari, Partner and Head of tax at <keyword id="146882" type="COMPANY" weightage="20" keywordseo="KPMG-India">KPMG India</keyword> called the amendment introduced in the Lok Sabha today "progressive in nature". 
 
He said - "It puts to rest the uncertainty on the penalties on the amounts deposited in the bank account post the announcement of <a href="http://www.businessinsider.in/Opposition-parties-hold-anti-demonetization-protests-all-over-the-country/articleshow/55670654.cms">demonetisation</a>. A new voluntary disclosure scheme for the benefit of the poor has been introduced (Pradhan Mantri Garib Kalyan Yojana, 2016) pursuant to which past years’ undeclared income can be offered to tax at the rate of 30% plus surcharge of 33% plus penalty of 10% making it effective approximate rate of 50%. Further, 25% of this amount will need to be deposited in a specified deposit scheme for 4 years interest free. The remaining 25% can be freely used by the assessee. This will give one more chance to the assessee to come out clean and declare the right income. Further, unexplained credit not disclosed above will suffer a tax of 60% plus surcharge of 25% and penalty of 10% making it an effective rate of 85%. Thus, he will almost lose everything if he does not avail of the above scheme.." 
 Vanwari concluded saying that this amendment appears to be very strategic. "It could be a WIN- WIN, because if everything goes well, tax collections will go up substantially, further money will be raised in specified bonds for country’s investments needs and further, the assessee would also retain 25% of his undisclosed income to himself for future use. All in all, the chase against <keyword id="6356023" type="UNKNOWN" weightage="20" keywordseo="Black-Money">black money</keyword>, relentlessly continues," he said.

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The <a href="http://www.businessinsider.in/Government-to-help-state-run-banks-with-more-funds-than-planned-as-bad-loans-continue-to-rise/articleshow/51037622.cms">financial condition </a>of India’s state-run banks hasn’t been too well lately. While on one hand these banks are trying to identify and tackle their stressed loans because of <a href="http://www.businessinsider.in/RBI-sets-eyes-on-ghost-loans-in-housing-sector/articleshow/50831641.cms">RBI’s clear instructions</a>, the big four consultancies, EY, PwC, Deloitte and KPMG, are introducing products based on algorithm so that bad loans and accounts can be identified. 
 
As per industry sources, many banks would now have to first identify the stressed loans before trying to clean up their balance sheets. As of today, these stressed loans stand at 10 to 12%, and as per the <a href="http://www.businessinsider.in/Banks-will-be-restored-to-health-by-March-2017-says-Raghuram-Rajan/articleshow/50958108.cms">RBI's direction</a>, <keyword id="127693" type="ORGANIZATION" weightage="100" keywordseo="NPAs">NPAs</keyword> have to be identified last by 31 March 2017. 
 
However, since a lot of banks are not able to identify stressed loans, these consultancies are playing their part in creating a business model to help them. 
 "With the stringent deadline looming it is difficult for them to identify the level of inconsistencies in NPA identification process and also the extent of clean up required at their end to meet the deadline set by <keyword id="30067" type="ORGANIZATION" weightage="100" keywordseo="RBI">RBI</keyword>, without automated assistance," Vikram Babbar, executive director, fraud investigation &amp; dispute services, EY told ET. 
 
To clear things further, EY has introduced a tool called NPAccurate to assist banks with the NPA. 
 
As per the sources, the <a href="http://www.businessinsider.in/RBI-relaxes-regulations-on-bad-loans-for-banks-to-attract-investors/articleshow/50833770.cms">number of loans</a> that public sector banks would have can range from 10,000 up to 10,00,000, which could be valued at around Rs 4 lakh crore, subject to be increased. 
 
<a href="http://www.thehindubusinessline.com/multimedia/dynamic/02364/bad-loans-NPAs_2364382f.jpg">Image source</a>

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Here's what KPMG and EY analysts have to say on govt's proposed black money tax changes

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