90% penalty & upto 10 years imprisonment for black money abroad
NEW DELHI: The Modi government on Friday unveiled a set of stringent provisions, including a 90% penalty on those who have undisclosed foreign assets and income overseas as it introduced a Bill to deal with black money stashed abroad. This will be above the 30% levy on the value of assets or income that will be imposed.
But those who want to avoid the hefty penalty will be given the option to pay 30% penalty of the value of undisclosed assets and avoid prosecution, the Undisclosed Foreign Income and Assets Bill introduced in the Lok Sabha proposed. Although the government wants the law to be active from April 2016, it has not specified how long the one-time compliance window would be open. The Bill has also detailed safeguards to prevent any misuse of the stiff provisions by tax authorities.
Apart from penalty, the bill provides imprisonment of up to 10 years for concealment , non-disclosure, false declaration as well as abetment. The provision for abetment can put financial advisors and chartered accountants in the crosshairs of the law should they be deemed guilty of cooking the books.
The Bill, was announced by finance minister Arun Jaitley in his budget speech on February 28, as the BJP government moved to smother the criticism of going soft on black money, a key poll plank during the 2014 general elections. The Bill is the latest move to get money stashed overseas back into India, even as the tax department has also asked its officers to focus on illegal wealth within the country as well.
Apart from the penalty, the legislation also lists a 10-year jail term for “willful attempt to evade tax”. Anyone who possesses or controls documents or books of accounts with false entries or statement, willfully omits entries or statements in the papers, or takes steps that result in tax evasion will be treated as willful evader. “In the prosecution proceedings, the willful nature of the default shall be presumed and it shall be for the accused to prove the absence of the guilty state of mind,” the government said.
For companies, the Bill has proposed prosecution and penalty for directors, managers, officers or secretaries in-charge of the company or involved with the decision. Failure to disclose details in tax returns will also result in a penalty of Rs 10 lakh.
The government has, however, suggested that those with minor balances in foreign accounts, which may have been missed due to oversight, be exempted from the penalty or prosecution provisions. As a result, it has fixed Rs 5 lakh as the threshold.
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Source:Timesofindia
