Black money: Jail term, severe penalties for guilty in the works, says SIT

Written by Shruti Srivastava | Shruti Srivastava | New Delhi | Updated: Nov 2 2014, 02:10am hrs
Black MoneyMain focus of the SIT is to prevent the generation of black money by effectively implementing the existing Income Tax Act, 1961: Justice Arijit Pasayat (Reuters)
The special investigation team (SIT) probing foreign accounts of Indians parking black money, set up by the Supreme Court (SC), is considering severe punishments for taxpayers found guilty of stashing illegal money abroad, including jail term, SIT vice-chairman Justice Arijit Pasayat told The Indian Express.

We have to change the mindset of people that generating black money will put them behind bars. This message has to be given. Deterrence will come when you have some cases, exemplary cases, where the tax evaders have been suitably punished and sent to jail. Passing such judgement in one or two cases will not make any difference, he said, adding that the main focus of the SIT is to prevent the generation of black money by effectively implementing the existing Income Tax Act, 1961.

Several such orders will make people believe that they will go to jail if they evade tax and generate black money. This is our focus, Pasayat added.

Under Sections 276C of the Income Tax Act, in case of a wilful attempt by tax payers to evade tax, penalty or any interest chargeable, she can be imprisoned for a term of six months extending up to seven years in case the evaded amount exceeds Rs 25 lakh.

In any other case, the rigorous imprisonment will not be less than three months and can be extended up to two years with fine.

A senior official close to the development said that the SIT is looking at recovering the black money by attaching properties in cases where the taxpayers are not able to meet the tax liability raised by the income tax department.

Pasayat said that recovery of the black money is a crucial issue and attachment of properties would be an option for bringing such unaccounted money back into the country.