Black money Bill tabled in Lok Sabha

A Bill proposing to prosecute those stashing illicit wealth abroad with 10 year rigorous imprisonment and providing for a window to persons seeking to come clean on such undisclosed assets, was introduced in Lok Sabha on Friday.  

In a step towards delivering on the BJP’s poll promise of unearthing black money stashed abroad, Union Finance Minister Arun Jaitley on Friday introduced in the Lok Sabha the Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015.

The Bill, which Mr. Jaitley proposed in his budget speech last month, while aiming to bring in a comprehensive new law for specifically dealing with black money stashed abroad, also provides for a separate taxation of such money.

Undisclosed income abroad, according to an official release, will no longer be taxed under the Income Tax Act. Tax on all foreign income will have to be paid at the flat rate of 30 per cent without any exemption, deduction, set off or carry forward losses that the Income Tax Act permits.

It provides for criminal liability with enhanced punishment of jail for 3-10 years for wilful evasion of tax on foreign income along with a penalty equal to three times the amount of tax evaded or 90 per cent of the undisclosed income or the value of the asset.

However, it provides for a window to offenders seeking to come clean on such undisclosed assets. In prosecution proceedings, the wilful nature of the default shall be presumed with the onus on the accused to prove that he/she is not guilty.

Those availing of the limited compliance window offer would have to pay tax at the rate of 30 per cent but concessional penalty would be equal to the tax amount.

Failure to file returns of foreign income or assets will attract a penalty of Rs. 10 lakh. Second and subsequent offence will be punishable with rigorous imprisonment of 3-10 years with a fine of up to Rs. 1 crore.

Introducing the Bill, Mr. Jaitley proposed that it would come into effect from April 1, 2016. He later told reporters that Parliament would consider it in the second half of the Budget session scheduled to commence on April 20.

Powers for officials

The tax authorities will have powers of discovery and inspection, issue of summonses, enforcement of attendance, production of evidence and impounding of account books and documents.

Undisclosed holdings of less than Rs. 5 lakh at any time during a year not reported out of oversight or ignorance will not entail penalty or prosecution.

The right to appeal will be to the Income Tax Appellate Tribunal and to jurisdictional High Courts and the Supreme Court on substantial questions of law.

To include tax evasion under the proposed legislation as a scheduled offence the Bill proposes to amend the Prevention of Money Laundering Act, 2002.

It also empowers the Centre to enter into agreements with other countries for the exchange of information, recovery of tax and avoidance of double taxation.

Mr. Jaitley said tax evasion puts a disproportionate burden on honest tax payers as they have to bear the brunt of higher taxes to make up for the revenue leakage caused by evasion, Mr. Jaitley said.

“The money stashed away abroad by evading tax could also be used in ways, which could threaten national security,” he added.

“The government is confident that this law will act as a strong deterrent and curb the menace of black money stashed abroad by Indians,” an official statement said.

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Printable version | Oct 11, 2021 12:39:05 AM |

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