While the amnesty scheme for black money hoarders abroad may not have exactly set government coffers on fire, it was a step in the right direction. The opposition was up on its feet saying the whole exercise was a damp squib. Individuals stashing away unaccounted-for wealth in secret bank accounts abroad have been on the radar of tax authorities for a while. Finance Minister Arun Jaitley said that bulk of <g data-gr-id="25">black</g> money is still within the country and called for an attitudinal change so that plastic currency becomes the norm and transactions in cash an exception. Jaitley said the government is at an advanced stage in considering the requirement of furnishing PAN (permanent account number) card details for cash transactions beyond a limit.
The NDA government’s strategy is to put more money in the pockets of middle and low income groups by raising exemption limits and incentivising savings which will encourage consumption and which, in turn, will increase volumes of indirect taxation. The Finance Minister said opening a large number of payment gateways, internet banking, payment banks, and the emerging reality of e-commerce would necessitate the use of banking transactions and plastic money significantly. He said those who had declared their undisclosed assets abroad under the compliance window offered by the government “can now sleep well” but those who have failed to file such a declaration would now face the music as “they will be liable to pay 30 percent tax and a penalty of 90 percent, thus leading to confiscation of the assets plus more. This law will create a deterrent in future against the flight of capital from India”. Referring to Modi’s initiative at the G-20 meeting for international cooperation in tackling unlawful assets held by the residents of one country on foreign soil, Jaitley said it was for lifting the veil of secrecy in banking transactions and in real time inform domestic taxation authorities about transactions of their citizens internationally. Under FATCA (Foreign Account Tax Compliance Act), the US and India would disclose to each other any real time transaction in accounts with financial institutions by its citizens in foreign territories. 638 people have declared their income amounting to Rs.3,770 crore under the 90-day compliance window offered by the government to those wanting to disclose their unlawful assets abroad under the new law. The government had also accelerated income tax assessments against people holding illegal money in Lichtenstein and HSBC bank at Geneva. Criminal prosecutions have been launched in cases where illegalities have been found. Going hammer and tongs against black money hoarders within the country will be no cake walk. The logistics of such an exercise will be onerous indeed.