NEW DELHI: Hinting at stringent action against those who failed to disclose foreign black money under compliance window, Finance Minister Arun Jaitley has said they “now stand the risk” of information on them reaching the tax authorities while those who disclosed can “sleep well”.
He also described as “ill conceived” the comparison between the assessed income of Rs 6,500 crore in HSBC and Rs 3,770 crore declared during the compliance window, saying these should not be treated as income under amnesty schemes.
Jaitley also said the government will soon make furnishing of PAN card details mandatory for cash transactions beyond a certain threshold to check flow of domestic black money.
Stressing that bulk of black money is still within India, he said there is a need to change the attitude to make plastic currency the norm and cash an exception and the government is working with various authorities to incentivise this change.
Jaitley also said that loans given by banks under MUDRA Yojana to entrepreneurs can only be withdrawn from ATMs.
The Finance Minister blamed the “high taxation regime in the past” for encouraging tax evasion and said the present “government’s policy is rationalization of tax structures, taxing at reasonable rates, placing more money in the hands of small earners, encouraging and promoting the use of plastic money by all sections of society and creating deterrence against those who continue to use unaccounted money”.
In a Facebook post, Jaitey also clarified that the previously assessed Rs 6,500 crore pertained to account holders in LGT Bank of Liechtenstein and HSBC Bank, Geneva, while declarations under the one-time compliance window by 638 persons totaled Rs 3,770 crore.
The disclosure of this amount, a day after this window closed on September 30, had drawn derisive reaction from Congress, which raised question about the announcement made by Prime Minister Narendra Modi in his Independence Day address that the government’s efforts to unearth foreign black money led to people declaring Rs 6,500 crore worth overseas assets.
Referring to the declarations made under the compliance window, Jaitley said, “Those who chose to declare between this period would not be prosecuted under the new black money law… These declarants can now sleep well.”
Under the new law, those who failed to make the disclosure within the compliance window would have to pay tax of 30 per cent and penalty of 90 per cent, and would be liable to be jailed for up to 10 years, he added.
“This law will create a deterrent in future against the flight of capital from India,” the minister said.
Stating that Switzerland has agreed to share information in various cases, Jaitley said the automatic exchange of information with various countries would also ensure that “those with illegal assets abroad, who have failed to make declaration, would now stand the risk of information relating to them eventually reaching the Indian taxation authorities”.
In the Facebook post titled ‘The NDA Government’s campaign against black money’, Jaitley said that no society can indefinitely sustain a system where income earners consider tax evasion to be a way of life.
“Regrettably our high taxation regime in the past eventually ended up encouraging tax evasion.
When States tax their people reasonably, they can persuade them to honestly declare their incomes. The early decades after independence witnessed India with high taxation rates, prompting people to evade.
“The capacity of the State to detect evasion was less than adequate,” he said.
The Finance Minister further said that the NDA Government has adopted a conscious strategy to put more money in the pockets of middle and low income groups by raising exemption limits and incentivising savings through fiscal policy.
“This will encourage consumption and bring more money into the system,” he said while listing measures like lowering of corporate tax rate to 25 per cent over the next four years and phasing out of most exemptions, other than those which incentivise savings and said the Modi government is stands by this commitment.
On the Modi government’s campaign against black money stacked abroad, Jaitley said in its very first Cabinet meeting it implemented the Supreme Court’s direction to constitute the Special Investigation Team.
“The UPA government had tried to evade the Supreme Court direction on one pretext or the other for over three years.
The (NDA) Government swung into action and accelerated all the income tax assessments against those with regard to whom information about holding illegal money abroad in Liechtenstein and in the HSBC bank at Geneva, were available.
“Most assessments have been completed and wherever illegalities are being found, criminal prosecutions have been launched against beneficiaries of these bank accounts.
“A total peak balance of about Rs 6,500 crore in these accounts has been assessed,” he added.
Jaitley further said that the amounts involving HSBC lists and the recently concluded compliance window should not be compared with the past amnesty schemes relating to domestic black money.-PTI
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