In a stern warning to black money holders, the government has said those caught with illicit wealth within the country would have to cough up 90 per cent in tax and penalty and also face up to 7 years in jail if they fail to declare it during the four-month compliance window.
The window, announced by Finance Minister Arun Jaitley in his Budget 2016-17, will begin on June 1 and provides an opportunity to avoid prosecution with payment of 30 per cent tax and 15 per cent penalty.
After the end of the window, the penalty will increase to 60 per cent while 30 per cent tax will also have to be paid – thus doubling the total payout to 90 per cent from 45 per cent.
Revenue Secretary Hasmukh Adhia told PTI in an interview that the government’s crackdown has led to over Rs 20,000 crore of domestic black money being unearthed in the last two years and if the tax department has information about any a black money holder, he will be debarred from availing of the window.
“If you do not declare (under the compliance window) and you are caught, then you will be charged 200 per cent penalty (on base tax rate of 30 per cent). Which means it becomes 90 per cent (30 per cent tax plus 60 per cent penalty) and be prosecuted under the Income Tax Act,” Adhia said.
“If we know your undisclosed income by any means, somebody has already informed us about it, and we have made a raid, in response to that information, we have given you an assessment notice, then also they cannot make disclosure under the compliance window,” Adhia clarified.
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 declaration.