NEW DELHI: Indian Finance Minister, Arun Jaitley, proposed a bill that calls 10 years jail on black money and 90 percent tax of undisclosed wealth for stashing illegal asset abroad.
‘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.
Jaitley later told reporters that the bill would be considered by Parliament in the second leg of the Budget session. The provisions of the new bill will also apply to beneficial owners or beneficiaries of such foreign assets.
Abetment or inducement of another person to make a false return, account, statement or declaration will be punishable with RI of six months to seven years.
This provision will also apply to banks and financial institutions aiding in concealment of foreign income or assets of resident Indians or falsification of documents.
As a measure of safeguard, the principals of natural justice and due process of law have been embedded in the bill by laying down the requirement of mandatory issue of notices to persons against whom proceedings are being initiated.
They would also be given an opportunity of being heard along with necessity of taking the evidence produced by them into account, with recording of reasons, passing of orders in writing and limitation of time for various actions of tax authority.
