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The Government has introduced a comprehensive new legislation on black money in Parliament on Friday, to tackle money stashed away abroad.
The proposed Bill, titled the Undisclosed Foreign Income and Assets (Imposition of New Tax) Bill, 2015 , has provision for imprisonment up to 10 years for concealing a foreign account, tax at the rate of 30 per cent along with penalty at the rate of 300 per cent of tax dues, no compounding and no settlement etc. It also provides for a small window for those holding overseas assets to declare their wealth, pay taxes and penalties to escape punitive action.
The Bill also proposes to make concealment of income and evasion of tax in relation to a foreign asset a ‘predicate offence’ under the Prevention of Money Laundering Act (PMLA) , which will enable the enforcement agencies to attach and confiscate the accounted assets held abroad and launch proceedings. It also seeks to make non-filing of income-tax returns or filing of returns with inadequate disclosure of foreign assets liable for prosecution, with punishment of rigorous imprisonment of up to 7 years.
The proposal to come out with a new law on black money was announced by Finance Minister Arun Jaitley in his Budget speech last month. The issue of black money, especially stashing of illicit wealth abroad in places, such as Switzerland, has been a matter of debate for a long time. In fact, this was a major issue for the ruling BJP during its election campaign when it promised to work toward curbing such illicit money.
Also read: Alert: FM on the black money trail
The new legislation has been conceptualised keeping this in mind. Once enacted, it will be mandatory for the beneficial owner or beneficiary of foreign assets to file returns, even if there is no taxable income. The date of opening of foreign account will be mandatorily required to be specified by the assessee in the income returns. The definition of ‘proceeds of crime’ under PMLA is also being amended to enable attachment and confiscation of equivalent assets in India where the assets located abroad cannot be forfeited.
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