New Delhi, March 18 (IANS) Giving concrete shape to Finance Minister Arun Jaitley’s budget announcement last month on recovering black money stashed away abroad, the cabinet-approved anti-black money law provides a short window to income tax assessees to declare assets, pay tax and penalty and avoid imprisonment.
The Foreign Income and Undisclosed Assets (Imposition of New Tax) Bill, 2015, to be tabled in the Lok Sabha, provides for a maximum of 10 years rigorous imprisonment for offenders who evade taxes in relation to foreign assets.
Under its provisions, the concealment of foreign income and assets will be non-compoundable and offenders will not be permitted to approach the Settlement Commission for resolving disputes.
There will also be a penalty at the rate of 300 percent of taxes on the concealed income and assets.
The new legislation will provide that income in relation to any undisclosed foreign asset or undisclosed income from any foreign asset will be taxable at the maximum marginal rate. Beneficial owner or beneficiary of foreign assets will be mandatorily required to file return, even if there is no taxable income.
The Bill seeks to make non-filing of income tax returns or filing returns with inadequate disclosure of foreign assets liable for prosecution with punishment of rigorous imprisonment up to seven years.
An Indian Express report last month said that 1,195 Indians were in the list of clients who held accounts in HSBC bank’s Geneva branch from 2006-2007,
Reacting to the report, Finance Minister Jaitley said the government has completed assessment of 350 foreign accounts while tax-evasion proceedings have been initiated against 60 account holders.
Meanwhile, the income tax department has shifted its attention from civil consequences to criminal consequences in serious cases of tax evasion.
“In its crusade against black money and with a view to having credible deterrence against generation of black money, the government has shifted its focus to successfully prosecuting the offenders in the shortest possible time,” the finance ministry said in a statement last month.
“During 2014-15 (up to December 2014), the income tax department had conducted searches in 414 groups and seized undisclosed assets of Rs.582 crore,” the statement added.
Undisclosed income of Rs.6,769 crore has been admitted by the taxpayers during such searches.
India has strongly advocated the fast implementation of the automatic exchange of tax information globally, within the time-frame agreed by the G20 countries, in the backdrop of media reporting names of Indian account holders in HSBC bank’s Swiss branch.
At the G20 Brisbane summit last November, leaders endorsed a new global transparency standard by which more than 90 jurisdictions will begin automatic exchange of tax information, using a common reporting standard by 2017-2018.
India has no official estimates of illegal money stashed away overseas, but the unofficial ones range from $466 billion to $1.4 trillion.
Salient points of the Bill
* Maximum of 10 years rigorous imprisonment for offenders who evade taxes on foreign assets.
* Penalty at the rate of 300 percent of taxes on the concealed income and assets.
* Income from any undisclosed foreign asset or undisclosed income from any foreign asset will be taxable at the maximum marginal rate.
* Beneficiary of foreign assets will be mandatorily required to file return, even if there is no taxable income.
* Non-filing of income tax returns or filing or returns with inadequate disclosure of foreign assets liable for prosecution with punishment of rigorous imprisonment up to 7 years.