Blackmoney bill in LS;10 yrs jail for concealing foreign funds
New Delhi: A Bill proposing to prosecute those stashing illicit wealth abroad with 10 year rigorous imprisonment and providing for a window to persons seeking to come clean on such undisclosed assets, was introduced in Lok Sabha today.
Finance Minister Arun Jaitley introduced ‘The Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015,’ proposing that it would come into effect from April 1, 2016.
“Recognizing the limitations of the existing legislation, it is proposed to introduce a new legislation to deal with undisclosed assets and income stashed away abroad,” said the Statement on Objects and Reasons of the Bill.
The Bill provides for criminal liability with enhanced punishment with 3-10 year imprisonment for willful attempt to evade tax in relation to foreign income, along with a fine.
Second and subsequent offence would be punishable with rigorous imprisonment for a term of 3-10 years with a fine of Rs 25 lakh to Rs 1 crore.
“In prosecution proceedings, the wilful nature of the default shall be presumed and it shall be for the accused to prove the absence of the guilty state of mind,” it added.
The Bill also provides for a penalty of three times the amount of tax for concealment of income in relation to a foreign asset.
Further, a penalty of Rs 10 lakh would be levied for failure to furnish return of income by persons holding foreign asset, failure to disclose foreign asset in the returns or furnishing of inaccurate particulars of such asset.
The Bill proposes a limited window to persons who have any undisclosed foreign assets who wish to come clean.
“Such persons may file a declaration before the specified tax authority within a specified period, followed by payment of tax at the rate of 30 per cent and an equal amount by way of penalty,” it said.
“It is merely an opportunity for persons to become tax compliant before the stringent provisions of the new legislation come into force,” the statement said.
Following are the highlights of the Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015, introduced in the Lok Sabha to deal with the menace of blackmoney stashed abroad:
* Undisclosed foreign income and assets to be taxed under the stringent provisions of the proposed new legislation
* It will apply to all persons resident in India
* Undisclosed foreign income or assets shall be taxed at the flat rate of 30 per cent
* Penalty for non-disclosure of income or an asset located outside India will be equal to three times the normal tax rate of 30 per cent
* Persons having overseas accounts having maximum balance of Rs 5 lakh in a year will not attract penalty or prosecution
* One time limited period compliance opportunity will be provided to persons to disclose overseas assets by paying 30 per cent tax and an equal amount by way of penalty and escape prosecution
* The compliance opportunity will not be an amnesty scheme as no immunity from penalty is being offered
* Failure to furnish return in respect of foreign income or assets shall attract a penalty of Rs 10 lakh
* Punishment for wilful attempt to evade tax will be rigorous imprisonment from three years to ten years in addition to fine
* Failure to furnish a return in respect of foreign assets and bank accounts or income will be punishable with rigorous imprisonment for a term of six months to seven years
* Provisions will also apply to beneficial owners or beneficiaries of such illegal foreign assets
* Abetment or inducement to make a false return or a false account or statement or declaration will be punishable with rigorous imprisonment from 6 months to 7 years
* This provision will also apply to banks and financial institutions aiding in concealment of foreign income or assets of resident Indians or falsification of documents
* There will be a right to appeal to the Income-tax Appellate Tribunal, and the High Court and the Supreme Court.
* Prevention of Money Laundering Act (PMLA), 2002, to be amended to include offence of tax evasion under the proposed legislation as a scheduled offence under PMLA
* Provisions of the bill will come into effect from April 1, 2016