The proposed new Bill on unaccounted wealth that the finance ministry will table in the current session of Parliament will allow an opportunity for black money hoarders to disclose their overseas assets, pay taxes on it along with a 300% penalty in order to avoid prosecution and imprisonment.
Central Board of Direct Taxes (CBDT) Chairperson Anita Kapur told reporters here that the new law on black money will introduce a “rebutable presumption” that the undisclosed foreign asset constitute concealed income. Assessees will be allowed an opportunity to present their views on why the asset was not disclosed.
“The very fact that one has not disclosed one’s foreign asset will make one liable for prosecution. If we detect an unreported overseas asset, we would quantify the income that escaped assessment and will bring it to tax at the maximum marginal rate (30%),” said Kapur. The new law will mandate reporting of movable and immovable assets abroad.
The existing law allows tax officers to levy penalty of 100-300%. The new law will disallow that discretion and propose a flat 300% penalty. This offence will also become a predicate offence to money laundering. Under the Prevention of Money Laundering Act, the government can seek more information about the assets of an individual from other nations.
Under the proposed law, concealment of income and assets and evasion of tax in relation to foreign assets will be prosecutable with rigorous imprisonment of up to 10 years. Further, the offence will be made non-compoundable and the offenders will not be permitted to approach the Settlement Commission.
“We do recognise and feel there are principles of natural justice to be followed. Everybody will be given a hearing,” Kapur said.
The CBDT Chief further said that that tightening of asset confiscation provisions under the Benami Transaction Prohibition Law and implementation of the Goods and Services Tax (GST) will also help curb generation of black money within the country.