In a slew of concerted measures aimed at tackling the black money menace, the government on Friday proposed mandatory reporting of assets held by individuals abroad and re-opening of income-tax return filings up to 16 years.
Presenting the budget, Finance Minister Pranab Mukherjee said: “I propose a series of measures to deter the generation and use of unaccounted money.”
Even as Mr. Mukherjee assured Parliament on coming out with a ‘White Paper' on black money in the current session, the government has sought to strengthen its efforts to check the flow of illicit funds.
The budget has proposed mandatory reporting for every resident having any assets, including financial interest in any overseas entity.
It would also be applicable on those having signing authority in any account located outside India.
“Furnishing of return by such a resident would be mandatory irrespective of the fact whether the resident taxpayer has taxable income or not,” says the budget document.
The proposal is to take effect from April 1 this year.
Alongside, the government has proposed levying a tax of 30 per cent on undisclosed money, credits, investments and expenditures, irrespective of the income slab of the individual. It has also proposed to bring in an amendment to existing regulations to facilitate re-opening of I-T return filings up to 16 years, where “the income in relation to any asset ... located outside India, chargeable to tax, has escaped assessment”.
Mr. Mukherjee proposed the introduction of a General Anti-Avoidance Rule (GAAR) to “counter aggressive tax avoidance schemes, while ensuring that it is used only in appropriate cases, by enabling a review by a GAAR panel”.
To plug all avenues of black money flow, the government also seeks to make reporting compulsory in case of assets held abroad and tax collection at source on trading in coal, lignite and iron ore. Also, it plans tax deduction at source on transfer of immovable property (other than agricultural land) above a specified threshold.
Among other measures pertaining to corporates, it is proposed to “increase the onus of proof on closely-held companies for funds received from shareholders as well as taxing share premium in excess of fair market value.”