Hinting at stringent action against those who failed to disclose foreign black money under compliance window, Finance Minister Arun Jaitley on Sunday 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Jaitley also said that loans given by banks under MUDRA Yojana to entrepreneurs can only be withdrawn from ATMs.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 rationalisation 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 totalled 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.