Govt announces host of steps to deal with black money menace
New Delhi: To check black money menace, the government today announced 10-year imprisonment for hiding foreign assets, along with a host of other tough measures including dis-incentivising of cash dealings in real estate and other transactions.
Besides framing new legislations, the government will also take steps to incentivise use of credit and debit cards and putting a cap on cash transactions, while quoting PAN will be mandatory for all sale and purchase of over Rs 1 lakh, Finance Minister Arun Jaitley said in his Budget speech.
Presenting his first full-year budget, Jaitley said the first and foremost pillar of his tax proposals is to enacting a new law to effectively deal with the problem of black money which eats into the vitals of our economy and society.
“To this end, I propose to introduce a Bill in the current Session of Parliament,” he said.
Under the proposed law, concealment of income and assets and evasion of tax in relation to foreign assets will be prosecutable with rigorous imprisonment of up to 10 years. Further, the offence will be made non-compoundable and the offenders will not be permitted to approach the Settlement Commission.
As regards curbing domestic black money, a new and more comprehensive Benami Transactions (Prohibition) Bill will be introduced in the current session.
“This law will enable confiscation of benami property and provide for prosecution, thus blocking a major avenue for generation and holding of black money in the form of benami property, especially in real estate,” Jaitley said.
He also proposed to amend the Income-tax Act to prohibit “acceptance or payment” of an advance of Rs 20,000 or more in cash for purchase of immovable property.
“Quoting of PAN is being made mandatory for any purchase or sale exceeding the value of Rs 1 lakh. The third party reporting entities would be required to furnish information about foreign currency sales and cross border transactions,” he said.
FM proposes setting up of autonomous banks board bureau
New Delhi: In order to improve governance of public sector banks, Finance Minister Arun Jaitley today proposed setting up autonomous banks board bureau for helping lenders raise capital for meeting expansion needs.
“The Bureau will search and select heads of public sector banks and help them in developing differentiated strategies of capital raising plans to innovative financial methods and instruments,” he said while presenting Budget for 2015-16 in the Lok Sabha.
This would be a step towards establishing a holding and investment company for banks, he said.
This issue was discussed extensively at the Gyan Sangam addressed by Prime Minister Narendra Modi last month.
During the two-day bankers’ retreat, heads of financial institutions have suggested the creation of Bank Investment Committee (BIC) and transfer of the government’s investment in banks to BIC.
Creation of BIC would over time enable the government to reduce ownership to below 51 per cent and help banks generate capital for growth.
In December, the government decided to permit public sector banks to raise up to Rs 160,000 crore from capital markets by diluting government holding to 52 per cent in phases so as to meet Basel III capital adequacy norms.
Public sector banks alone require Rs 2.40 lakh crore by 2018 to meet global Basel III norms.
Wealth tax abolished; extra 2 pc surcharge on super rich
New Delhi: Asking rich and wealthy to pay higher tax, Finance Minister Arun Jaitley today abolished the wealth tax but increased the surcharge to 12 per cent on individuals earning Rs 1 crore and above annually and on firms with an annual income of Rs 10 crore or more.
Moreover, the minister also introduced a surcharge of 7 per cent on companies having an income between Rs 1 crore and Rs 10 crore.
The new measures will lead to tax collection of Rs 9,000 crore whereas the wealth tax could earn only Rs 1,008 crore, he said.
“With this 2 per cent additional surcharge a collection of Rs 9,000 crore is targeted against a tax sacrifice of Rs 1,008 crore (on account of abolition of Wealth Tax),” Jaitley said while presenting the Budget for 2015-16.
The surcharge would now be 12 per cent for individuals earning Rs 1 crore and above and companies with income of Rs 10 crore and above.
“The rich and wealthy must pay higher taxes,” Jaitley said.
There was no point in continuing the Wealth Tax as the cost of collection was high, he said, adding this will lead to tax simplification and widening of the tax base.
The surcharge would be applicable on individuals, Hindu Undivided Families, firms, cooperative societies and local authorities having income exceeding Rs 1 crore.
A surcharge of 10 per cent on taxable income of Rs 1 crore and above was imposed in 2013-14 by the then Finance Minister P Chidambaram.