Rolling out a multipronged strategy to clamp down on the parallel economy, Finance Minister Arun Jaitley on Saturday proposed the introduction of two comprehensive Bills in the current Parliament session to tackle black money — both on the domestic and international front.
The government will soon introduce a Bill on black money to specifically deal with illicit money stashed abroad and another, the Benami Transactions (Prohibition) Bill, to enable confiscation of benami property, particularly in real estate, and enable prosecution of offenders.
Under the proposed law on black money, concealment of income and assets and evasion of tax on foreign assets will be declared a non-compoundable offence, punishable with upto 10 years’ rigorous imprisonment and penalty at the rate of 300 per cent tax.
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Offenders will no more have the option of approaching the Settlement Commission.
Abettors, whether individuals, companies or financial institutions, will also be prosecuted and penalised.
The proposed law will make it mandatory for beneficial owners or beneficiaries of foreign assets of any value to file returns. Assessees will be bound to quote the date of opening of foreign accounts.
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No exemptions Non-filing or inadequate disclosure will attract up to seven years’ imprisonment, whereas income/undisclosed income from undisclosed/disclosed assets abroad will be taxable at the maximum marginal rate. In such cases, no exemptions or deductions will be allowed.
Seizure clause
Under the proposed law, the government will also make concealment or tax evasion on foreign assets a predicate offence under the Prevention of Money Laundering Act (PMLA), enabling prosecution of offenders, besides attachment and confiscation of unaccounted assets situated abroad. The definition of “proceeds of crime” under the Act is accordingly being amended to facilitate confiscation of assets in India equivalent to such a property, if it cannot be forfeited.
False declarations or documents in business transactions relating to Customs is also being made punishable under PMLA.
The government plans to amend the Foreign Exchange Management Act to enable seizure of domestic assets of a value equivalent to foreign exchange/security or immovable property located abroad, held in violation of the Act. Such violations will also attract up to five years’ punishment and penalty.
Curbs on advance Besides, Income Tax Act provisions are being improved to prohibit acceptance or payment of an advance of Rs.20,000 or more in cash for purchase of immovable property, levying penalty of equal amount.
While quoting PAN will be made mandatory for purchase/sale exceeding value of Rs.1 lakh, third-party reporting entities will have to furnish details of foreign currency sales and cross-border transactions. The common practice of splitting of reportable transactions to evade detection will also be addressed.