Revenue Secretary Hasmukh Adhia said it is wrong to assume that black money that has come into the banking system following the demonetisation will become white and unless tax is paid on such amount it will continue to be remain black.
He also said the Brics nations have pledged to automatically share tax information and adopt global standards on tax transparency to check cross border tax evasion.
“Do you think that by simply depositing the money in a bank account makes black money into white? It doesn’t. Merely, black money has come into banking channel, you can’t tell that the entire black money has been converted into white.
“It will become white when we charge taxes, when the income tax department is able to reach to them and issue them a notice,” Adhia told reporters on the sidelines of the two- day meeting of the Brics revenue heads here.
The two-day meeting of the revenue heads of Brazil, Russia, India, China and South Africa (Brics) have also resolved to support other developing nations in increasing their tax administrations’ capacity to implement the OECD/G20 standard on automatic exchange of information, Adhia said.
“We recognise the importance of the exchange of information between competent authorities in preventing cross-border tax evasion and we resolve to exchange information, both on request and on automatic basis, and to adopt global standards on tax transparency,” he said.
Adhia said unless 50 per cent is paid on the unaccounted money which has come in to the banking system for the PM’s Graib Kalyan Yojana, it will remain black money.
He said the people who are depositing black money into Jan Dhan accounts of others will be caught and be dealt according to the law.
When asked whether the government will ask for the source of money up to the permissible limit of Rs 2.50 lakh in every account, Adhia said it will happen only in the cases where some misuse has taken place.
“In genuine cases, there will not be any scrutiny but if there is some misuse then an inquiry will be there. For instance, if somebody has deposited 2.5 lakh in 15 accounts then we will check with those 15 account holders and trace the money,” he said.
Adhia said the government will also take strict action against those bank officials and income tax officials who are helping people in laundering.
He reiterated that the government has no plans to cap gold holding by an individual and also sealing of bank lockers.