Finance Minister Arun Jaitley said the domestic black money holders being offered a limited period compliance window to come clean in Budget 2016 is not an amnesty scheme as disclosures will be charged at 45 per cent as against the normal rate of 30 per cent. The government had raised Rs 10,000 crore through the last domestic black money amnesty scheme in 1997.
“In amnesty (scheme), you just pay tax and get away with it,” he said in his post-Budget 2016-17 interaction with industry chambers.
In Budget 2016, Those with undisclosed income and assets are being provided a four-month window beginning June 1 to declare their wealth, pay normal tax rate of 30 per cent plus 15 per cent in penalty and surcharge and escape prosecution.
“(For) incomes which have escaped assessment, we have opened a compliance window. You pay higher (tax). It is not an amnesty scheme because you have to pay 50 per cent more than normal tax… And you have to pay it at current values, not at some old assumed value,” he said.
Disclosures will be charged the normal tax rate of 30 per cent plus a penalty of 7.5 per cent and a similar percentage of surcharge.
The total tax and penalty for domestic black money holders is less than 60 per cent that the government had levied on foreign unaccounted asset holders last year.
A total of Rs 4,147 crore of undisclosed wealth was declared during the 90-day foreign black money compliance window that ended September 30, 2015. At 60 per cent (30 per cent tax and 30 per cent penalty), the government got a net tax of Rs 2,500 crore from the declarations.
Presenting his Budget for 2016-17 fiscal, Jaitley had on Monday stated in the Lok Sabha that the government is fully committed to removing black money from the economy.
“Having given one opportunity for evaded income to be declared once, we would then like to focus all our resources on bringing people with black money to the book,” he had said.
The compliance window is proposed to be open from June 1 to September 30, 2016, and the payment can be made within two months of the declaration.
The income declared will enjoy immunity from any scrutiny or enquiry or any prosecution proceedings under the Income Tax Act or the Wealth Tax Act.
The declarations made under the scheme will also have immunity from the Benami Transaction (Prohibition) Act, 1988 subject to certain conditions.
The surcharge levied at 7.5 per cent of undisclosed income will be called Krishi Kalyan surcharge to be used for agriculture and rural economy.