New Delhi: Under fire for not doing enough to tackle the black money menace, the government proposes to introduce a comprehensive new law which carries a punishment of up to 10 years in jail for Indian nationals parking undeclared cash and assets abroad.
In his budget address on Saturday, Finance Minister Arun Jaitley said the government would introduce the changes in a new law during the current session of parliament, which will also allow enforcement agencies to seize assets held abroad.
The hidden cash “eats into the vitals of our economy and society,” Jaitley said. “The problems of poverty and inequity cannot be eliminated unless generation of black money and its concealment is dealt with effectively and forcefully.”
Illegal deposits abroad cost India billions of dollars in lost revenue and Prime Minister Narendra Modi’s government has promised to change laws and enact new measures to bring back such funds, known in India as ‘black money’.
Evading tax on foreign assets will carry a jail sentence of up to 10 years, under the government’s proposed changes, while failing to disclose assets adequately will be punishable by up to 7 years.
Further, the offence will be made non-compoundable, a penalty of 300 per cent will be imposed and the offenders will not be permitted to approach the Settlement Commission.
It will be made mandatory to file returns in respect of foreign assets.
The date of opening of foreign account would be mandatorily required to be specified by the assessee in the return of income.
Undisclosed income from any foreign assets will be taxable at the maximum marginal rate under the proposed law, and entities, banks, financial institutions and individuals involved will all be liable for prosecution and penalty.
When assets abroad cannot be forfeited, the new rules could allow the government to confiscate equivalent assets in India.