New Delhi: On Friday, the Modi government unveiled a set of stringent provisions to tackle the menace of black money being stashed away abroad.
This include 10 years rigorous imprisonment and 90% penalty on those who have undisclosed foreign assets and income overseas.
This will be above 30% levy on the value of assets or income that will be imposed. The Undisclosed Foreign Income and Assets Bill introduced in the Lok Sabha proposed that if someone wants to avoid the hefty penalty will be given the option to pay 30% penalty of the value of undisclosed assets and avoid prosecution.READ MORE
Apart from penalty, the bill provides imprisonment of up to 10 years for concealment, non-disclosure, false declaration as well as abetment. The provision for abetment can put financial advisors and chartered accountants in the crosshairs of the law should they be deemed guilty of cooking the books.
The Bill was announced by finance minister Arun Jaitley in his budget speech on February 28, as the BJP government moved to smother the criticism of going soft on black money, a key poll plank during the 2014 general elections.
"It's not an amnesty scheme because under amnesty you only pay tax, and no penalty. Here the requirement is to pay tax at 30% and equivalent 30% as penalty. The intention of the government is not to give a soft landing facility to anyone. The one-time compliance opportunity is to enable such people who have hidden assets abroad to come clean and avail of the opportunity. It is not a revenue mobilization measure," revenue secretary Shaktikanta Das told TOI.
For companies, the Bill has proposed prosecution and penalty for directors, managers, officers or secretaries in-charge of the company or involved with the decision. Failure to disclose details in tax returns will also result in a penalty of Rs 10 lakh.
The government has, however, suggested that those with minor balances in foreign accounts, which may have been missed due to oversight, be exempted from the penalty or prosecution provisions. As a result, it has fixed Rs 5 lakh as the threshold.