Union Finance Minister Arun Jaitley on Monday announced a new amnesty scheme for those holding unaccounted money and assets to come clean by paying 45 percent of such wealth.
The government offers a compliance window to domestic tax payers to declare their past transgressions and come clean by paying 45 percent of the undisclosed income and assets (tax 30 percent, surcharge 7.5 percent and penalty 7.5 percent), Jaitley said while presenting the 2016-17 general budget in parliament.
Regarding the income shown in these declarations, there will be no scrutiny or enquiry under the Income Tax Act or the Wealth Tax Act and the declarants will have immunity from prosecution, Jaitley said.
Immunity from Benami Transaction (Prohibition) Act, 1988 is also proposed, subject to certain conditions.
The minister said after offering an opportunity to declare the concealed income, the government will focus all its resources on bringing people with black money to book.
"This shows that the government has launched a two-pronged attack on domestic black money - one by curbing the generation of black money, and second, by asking domestic tax evader to come clean by disclosing their undisclosed income and assets," Suraj Nangia, partner, Nangia & Co., told IANS.
He said the government is tackling the menace of domestic black money by effecting changes in rules to discourage cash transactions, compulsory reporting of Permanent Account Number and others.
The new amnesty scheme is yet another constructive step to kill the menace of domestic black money, Nangia added.
The 7.5 percent surcharge on the undisclosed income will be called Krishi Kalyan surcharge, which will be used for agriculture and rural economy.
Last October, the government said it had received 638 declarations regarding undisclosed foreign assets amounting to Rs.3,770 crore under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (the Act).
Thirty percent tax and as much penalty was to be paid by December 31, 2015. The compliance window that opened on July 1, 2015, closed on September 30, 2015.
The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (the Act) has been enacted to deal with the menace of black money stashed abroad.
The Act also provided for a compliance window for a limited period to people who have undisclosed foreign assets which they had not disclosed for the purposes of income tax so far.