Blackmoney: No amnesty for tax evaders, says Arun Jaitley

Written by PTI | New Delhi | Updated: Jul 31 2014, 02:44am hrs
Arun JaitleyFinance Minister Arun Jaitley speaks in the Lok Sabha during the budget session in New Delhi. PTI
The government today ruled out any tax amnesty scheme to unearth blackmoney saying it goes against honest taxpayers even as it sought to send out a positive signal to investors by promising a re-look at the controversial GAAR shortly.

Finance Minister Arun Jaitley also referred to demands of some states like West Bengal, Bihar, Odisha and Punjab for special packages and said government will take a view on the specific demands of the debt-ridden states after receiving the report of the Finance Commission, which is expected by the year-end.

He was speaking in the Rajya Sabha while winding up the debate on Finance Bill which was later returned by the Upper House, marking the completion of the budgetary process for 2014-15.

Minister of State for Finance Nirmala Sitharaman, while responding to specific issues raised by members, made it clear that government has no intention to give amnesty to tax evaders to unearth black money.

"The experience shows when you bring in VDIS (Voluntary Disclosure of Income Scheme), it discriminates against genuine tax payers. Those of you who pay taxes are disincentivised... it goes against honest tax payers... It may be may not be a conducive path for recovering more taxes," she said.

Referring to the tax proposals announced in the budget, Sitharaman said attempts have been made to provide relief to small and medium tax payers to encourage savings and promote growth despite the limited fiscal space.

Later responding to queries on implementation of the controversial General Anti-Avoidance Agreement (GAAR), Jaitley said, "After the budget process is over, we will look into it whether it is that date or some other date and whether some amendments are required or not and only then we will be able to make a final call on that."

GAAR, which aims to minimise tax avoidance for investments made by entities based in tax havens, is to come into from April 1, 2015, after being postponed once.

Announced by the previous UPA government in 2012-13 budget, GAAR had created nervousness among the investors.

Seeking to allay fears over monsoon condition, Jaitley said, "The situation is more optimistic, monsoons have picked up... There is no drought like situation."

He added there is a back-up plan which would be put into action if the situation demands.

On the issue of taxes foregone, the Minister said it is an ambiguous phrase which includes concessions given by the government to boost industrial activity and also those cases where it is difficult to collect dues as there are no assets.

In her address, Sitharaman said, "The previous government has left very little fiscal space for the Finance Minister to do anything out of the box and as a result there has not been much of a room available."

She said Jaitley took the challenge and retained many of the targets set by the UPA government.

On the proposal to increasing the tax exemption limit under 80C of the Income Tax Act from Rs 1 lakh to Rs 1.5 lakh, she said, "This is definitely going to have an impact on the savings of the country which we need to give a great impetus."

"I would request and seek all the members to rise above partisan differences and support the Bill," she added.