Government said it received an amount of Rs. 3,770 crore from 638 declarations under the one-time black money compliance window that closed recently. “These figures are subject to final reconciliation,” the Finance Ministry said in a statement based on figures provided to it by the CBDT. It added that tax at the rate of 30 per cent and penalty at the rate of 30 per cent is to be paid by December 31, 2015.
The Narendra Modi-led central government is determined to tackle the black money issue, and their election agenda was based on this issue. Since, they came to power they gave different theories on Black money and some of its leaders went on saying this was just a gimmick. They always blamed that previous United Progressive Alliance (UPA) government failed to tackle the issue of black money.
The window, created under the new anti-Black money Act, saw a hectic rush as declarants made a beeline to meet the deadline at the only I-T office designated for the task. Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (the Act) has been enacted to deal with the menace of black money stashed abroad. The Act also provided for a compliance window for a limited period to persons who have undisclosed foreign assets which they had not disclosed for the purposes of Income-tax so far. The compliance window opened on 1st July, 2015 ended on 30th of September 2015. It said the officer designated to receive declarations worked till midnight even as the e-filing portal was also open till midnight to receive the declarations.
The Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015, popularly known as Black Money Bill was passed in Lok Sabha, Black Money doesn’t necessarily have to be owned in foreign countries. Is the government forgetting the point that most of the black money in foreign countries is rather owned in India and saved abroad? There are millions of people here in India who evades tax in the name of sole-proprietorship and what happens to that? Isn’t that money black and not under the purview of this bill? If this bill is aimed only at foreign deposits, then this is another bill wrongly passed and just for namesake. In a step towards delivering on the BJP’s poll promise of unearthing black money stashed abroad, government has introduced the Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015, in the parliament.
Tax on all foreign income will have to be paid at the flat rate of 30 per cent without any exemption, deduction, and set off or carry forward losses that the Income Tax Act permits. Enhanced punishment of jail for 3-10 years for willful evasion of tax on foreign income along with a penalty equal to three times the amount of tax evaded or 90 per cent of the undisclosed income or the value of the asset, there is a limited compliance window offer. Offenders would have to pay tax at the rate of 30 per cent but concessional penalty would be equal to the tax amount. Failure to file returns of foreign income or assets will attract a penalty of Rs. 10 lakh. Second and subsequent offence will be punishable with rigorous imprisonment of 3-10 years with a fine of up to Rs. 1 crore. Undisclosed holdings of less than Rs. 5 lakh at any time during a year not reported out of oversight or ignorance will not entail penalty or prosecution.
This black money recovery is just a tip of an iceberg, when this country’s parallel economy is moving on black money. The politicians-businessmen-bureaucrat nexus is main beneficiary of it. I’m sure they are not included in the last of these 638 people. India has been made grazing field by above trio and are deeply involved in this racket of black money. However, none of the central government is sincere and honest to probe them and seize illegal money looted by these people by abusing power. These steps are just an eye wash to fool and deceive people. Even, BJP government is fooling people in the name of black money.
The Bill empowers the Centre to enter into agreements with other countries for the exchange of information, recovery of tax and avoidance of double taxation. To include tax evasion under the proposed legislation as a scheduled offence the Bill proposes to amend the Prevention of Money Laundering Act, 2002. The right to appeal will be to the Income Tax Appellate Tribunal and to jurisdictional High Courts and the Supreme Court on substantial questions of law. The tax authorities will have powers of discovery and inspection, issue of summonses, enforcement of attendance, production of evidence and impounding of account books and documents.
The amounts declared cannot be said to be substantial by any standards. In comparison, a tax amnesty scheme called the Voluntary Disclosure of Income Scheme (VDIS) held in 1997 had fetched over Rs. 10,000 crore. Anyway, this can be a big achievement of Modi government. However, focus should be on black money in domestic economy rather than harassing those holding in dollars.