After Narendra Modi’s big crackdown on black money last year after he demonetised the old Rs 500 and Rs 1000 currency notes, the Prime Minister has now hinted at taking the campaign against illegal accumulation of wealth to a new level and tax evaders across the country have a reason to run scared. PM has said that he wants the crackdown to be enhanced and even hinted at reinforcing the Benami Transactions (Prohibition) Amendment Act, 2016 to give enforcement agencies more teeth. In what could be a major step in the war against black money, PM Modi has reportedly asked the tax officials to implement the Operation Clean Money (OCM) with gusto.
If the proposed changes are made in the benami law, culprits face a penalty of rigorous imprisonment of up to seven years and a fine that may extend up to 25% of the fair market value of such property. It will also allow the government to confiscate benami deposits. However, a report published in The Financial Express states that analysts believe that the law hasn’t been a major deterrent to those holding assets in others’ names so far.
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The crackdown issue was discussed at a meeting on Tuesday where Prime Minister Narendra Modi took stock of the steps taken by the finance ministry for a smooth rollout of GST and anti-black money drive post note ban, among others as reported by the news agency PTI. One of the major issues discussed during the meet was preparedness for GST which is being seen as the biggest tax reform since Independence. The agency reported that the meeting was attended by Revenue Secretary Hasmukh Adhia and other senior revenue officials.
Given the focus of the government on black money, it is believed that measures being planned by the tax department against tax evaders also came up during the meet. Tax, penalty and surcharge collected via the tax amnesty scheme floated after demonetisation aggregated Rs 2,300 crore. The scheme, PMGKY, provided for payment of 50 per cent tax and penalty on unaccounted cash deposited in bank accounts.