Committing to deal strongly with black money, Finance Minister Arun Jaitley today warned those having undisclosed income against missing the chance to make the declaration by September 30 even as he said rapid progress has been made with regard to probe in Panama paper leaks.
Jaitley was replying to a debate on Benami Transactions (Prohibition) Amednment Bill, 2016 in the Rajya Sabha, which later passed the legislation by voice vote. The Lok Sabha passed it last week.
A law alone will not solve the problem of black money but efforts will have to be made to create fear of law and stop its generation, he said.
“Since it’s the Benami law like the black money law, there has to be a deterrent provision which we have put it in this partciular law and I hope people get the clear signal and don’t give the state an opportunity as far as using this law is concerned,” he said.
Referring to the Income Disclosure Scheme, Jaitley said those having unaccounted money should take advantage of the disclosure window ending September 30 to come clean by paying 45 per cent tax and penalty.
Talking about the Panama leaks, the minister noted that the government had created a multi agency group.
The multi-agency group probing the Panama papers leaks, which has named around 500 Indians who have allegedly stashed money in offshore entities, had submitted three reports to the government last month.
“There are many people who have illegal accounts, there are some who say they have transfered money on the basis of RBI rules. That investigations have progressed a lot,” he said.
He further said the government has taken action in case of HSBC accounts, Lichtenstein Bank and the information provided by International Consortium of Investigative Journalists (ICIJ).
Jaitley said that fiduciary and trustee holding is allowed under the Benami bill but the investment should be made from the known sources of income.
He said the law also provides for those genuine property purchases which could have been funded by family members or other sources as a loan.
The earlier term of “known source of income” has been replaced with “known sources” with regard to purchase of property, the Finance Minister added.
He said the property outside the country will not be covered under the Benami law but will be dealt with under the black money law.
The Finance Ministry said that sufficient safeguards have been put in place to prevent any misuse provisions of the Benami law, which seeks to confiscate such properties.
“Four layers of officers and an appeal tribunal has been created since this is a major power,” he said, adding it is being done because there were apprehensions that one officer might end up being corrupt.
Talking about the properties in tribal areas, he said those can be exempted from the purview of the law by the Governor of the respective state.
On concerns being expressed over mandatory use of PAN Card for purchase of high value properties, he said already 22-23 crore cards have been issued out of 25 crore families and anyone spending lakhs of rupees could obtain it online.
Further, he added that states are digitalising the land records which will help in dealing with the black money.
Jaitley said the Benami bill is aimed at seizing benami property besides prosecuting those indulging in such activities as the provisions for prosecution could not be operationalised in want of rules in the 1988 Act.
He said the government was bringing amendment as if it would have brought a new Act “penal provisions could not apply retrospectively and those guilty of violations would have got scot-free.”
The 1988 Act, which also has provisions for prosecution, has not been operationalised as the rules in this regard have not been framed, he said and added Law Ministry has suggested amendment for entire functioning of the Bill and accordingly rules have to be framed.
The Minister said while the 1988 Act has nine sections, the amended law would have 71 sections. Under Article 20 of the Constitution, penal provisions cannot be applied retrospectively, he said.
He said the government has accepted the Parliamentary Standing Committee’s suggestion to change the words in the Bill from “known sources of income” to “known sources” with a view to further strengthen the provisions.
Jaitley said that offences under the amended law would be non-cognisable as the government does not want multiple agencies to get involved and harass people.
Besides bonafide religious trusts, he said there are few exceptions relating to Hindu Undivided Family and trusts owning properties.
Participating in the debate, Shamsher Singh Dullo (Cong) demanded digitising the land records and bringing in black money transactions in real estate.
He said the capital in the country was concentrated in the hands of 15-20 persons only and demanded that as per the Prime Minister’s announcement, the government should bring in black money kept in foreign and provide Rs 15 lakh each to the accounts of people.
Bhupender Yadav (BJP) applauded the move for Benami bill saying it will check the parallel economy. Attacking the government, Naresh Agrawal (SP) demanded to know how many legislations it planned in the name of checking black money.
“We are hearing it. There are so many bills. Some bill should be final. At least announce that this is the last bill. How many Acts you plan in the name of Black Money? When Real Estate Bill came Venkiah Naidu said it will stop black money in Real Estate.
There is Prevention of Corruption Act, Whistle Blower is pending,” he said. He quipped, “If so many Acts are not effective, bring an Act to abolish these”.
He also demanded to know as to what happened to Prime Minister’s announcment of bringing 15 lakh in each account.
In the present Benami Bill, Income Tax has been empowered with the power to arrest and added that government already had ED, CBI and SEBI, Agrawal said.
He also asked the governemnt what it did on Panama leaks alleging there were many companies registered and black money was brought to India through FDI route.
A Vijaykumar (AIADMK) said the provisions in the bill are silent on the role of whistle blowers and their protection and stressed that the Bill be reconstructed.
Vivek Gupta (AITC) said there are certain problems in the bill as some provisions are not defined properly and it also conflicts with state laws, especially tribal laws.
He suggested the government to hand over the confiscated land to the state government while seeking details on number of people arrested since the law was formed in 1988.
Harivansh (JD-U) said benami investments should be prevented and emphasised the need to create an atmosphere for proper implementation of the bill.
Ritabrata Banerjee (CPI-M) said the government has not taken into account the recommendations of the Parliamentary Standing Committee even as he supported the the bill saying “united we need to act on this”.
Munquad Ali (BSP) said the bill should be implemented properly as the black money holders would find novel ways to escape.
Welcoming the bill, R S Bharathi (DMK) aired certain reservations while suggesting that confiscated properties should be handed over to states and adjudicating authority must be appointed either in each state or region wise.
Supporting the bill, Rajeev Shukla (Cong) said the bill should not lead to unnecessary harassment and the government should take precaution on this.
Ram Kumar Verma (BJP) said the economy would have not a boost had the bill come long time back.
Naresh Gujral (SAD) sought to know the status of those properties which were taken in relatives names earlier and later transferred back to children of the original owner when this bill come into force.
He also said that 30 days period to provide evidence of records should be extended keeping in mind the land records still not digitised in many parts of the country.
K Keshava Rao (TRS) said many recommendations of a Parliamentary Standing Committee have not been factored in.
He wanted the government to revisit the bill at the time of rule making while defining benami transaction and powers to adjudicating officers among others.
Since Telangana has come out with rules to regularise benami properties, he wished to know if it conflicts with this bill.