IANS
NEW DELHI, MARCH 20
A bill on unearthing black money and punishing those with ill-gotten wealth stashed abroad was tabled in the Lok Sabha on Friday, the last day before parliament goes into its scheduled month-long recess.
The Undisclosed Foreign Income and Assets (Imposition of New Tax) Bill, 2015, proposes a short window to overseas income tax assesses to declare their assets, pay tax and a penalty and thus avoid imprisonment.It provides for a maximum of 10 years' rigorous imprisonment for evading tax on foreign assets.
There will also be a penalty at the rate of 300 percent of taxes on the concealed income and assets.
Under the proposed legislation's provisions, concealing foreign income and assets will be non-compoundable and offenders will not be permitted to approach the Settlement Commission for resolving disputes.
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.
A beneficiary of foreign assets will be mandatorily required to file returns, even if there is no taxable income.
It also 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.
The bill will now be taken up for discussion after Lok Sabha resumes sittings next month and could thereafter be referred to the parliamentary standing committee for scrutiny before being taken up for passage.
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 Arun Jaitley said the government has completed assessment of 350 foreign accounts while tax evasion proceedings have been initiated against 60 account holders.
India has strongly advocated the fast implementation of the automatic exchange of tax information globally, within the time-frame agreed to 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.
"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.
Blackmoney Bill in LS, 10 years jail for concealing foreign funds
Blackmoney stashed abroad will entail a 10 year rigorous imprisonment and a whopping 90 per cent tax under the proposed stringent law that provides for a limited window of opportunity to offenders to disclose illicit wealth and escape prosecution.
Acting on his Budget promise, Finance Minister Arun Jaitley introduced in the Lok Sabha today 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.
