Millennium Post

Blackmoney Bill in LS provides for 10 yr jail

Acting on his Budget promise, Finance Minister Arun Jaitley introduced in the Lok Sabha on Friday an 88-clause Bill that seeks to unearth blackmoney and assets stashed abroad, an issue the BJP and Prime Minister Narendra Modi had campaigned against in the Lok Sabha elections.

‘The Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015’, that is proposed to come into effect from April 1, 2016, provides for taxation at the flat rate of 30 per cent without any exemption, deduction, set off or carry forward losses permissible under the Income Tax Act.

The Bill provides for a separate taxation of undisclosed income abroad which will be no longer be taxed under the Income Tax Act. In the statement of objects and reasons appended to the Bill, Jaitley says a limited window is provided to offenders to file a declaration before a specified tax authority within a period, followed by payment of tax at 30 per cent and an equal amount of penalty.

“Upon fulfilling these conditions, a person shall now be prosecuted under the Bill and declaration made by him will not be used as evidence against him in the Wealth Tax, Foreign Exchange Management Tax, the Companies Act or the Customs Act,” it said.

“Wealth Tax shall not be payable on any asset so disclosed. It is merely an opportunity for persons to become tax compliant before the stringent provisions of the new legislation comes into force,” Jaitley said. 

An official release made it clear that the window of opportunity is not an amnesty scheme as no immunity from penalty is being offered.

Violation of the provisions will entail stringent penalties. The penalty for non-disclosure of income or an asset located outside would be equal to three times the amount of tax payable--90 per cent of the undisclosed income or the value of the asset.

However, to protect persons holding foreign accounts with minor balances which may not have been reported out of oversight or ignorance, it has been provided that failure to report bank accounts with a maximum balance of Rs 5 lakh at any time during the year, will not entail penalty or prosecution.

Wilful attempt to evade tax in relation to foreign income or asset will attract a rigorous imprisonment of 3 years to 10 years and a fine. Failure to furnish a return in respect of foreign assets and bank accounts or income will be punishable with RI of 6 month to 7 years.

The same term of punishment is prescribed in cases where the assessee has filed a return of income but has not disclosed the foreign asset or has furnished inaccurate particulars, says the provisions of the Bill. Failure to furnish return in respect of foreign income or assets shall attract a penalty of Rs 10 lakh.

The same amount of penalty is prescribed for cases where although the assess has filed a return of income, but he has not disclosed the foreign income and asset or has furnished inaccurate particulars of the same.
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