Under the new law on black money, banks and other financial institutions (FIs) will also face action if they are found to have abetted stashing of illicit wealth, along with the action against the offenders and beneficiaries of this crime.
The new law will not only target the perpetrator of the crime, of holding or generating black money, but also the “arbitrator, the abettor and the beneficiary”, Revenue Secretary Shaktinkanta Das said today.
The comments assume significance in view of the charges being faced in India and elsewhere by global banking major HSBC for allegedly helped individuals in parking ill-gotten wealth in Switzerland.
“… The new legislation will deal with perpetrators of the offence of black money, as also the abettor and the beneficiary,” he said, while adding that the perpetrators could be individuals entities or institutions, while abettors could be banks or financial institutions.
Finance Minister Arun Jaitley announced in the Union Budget on Saturday that the government will frame a new law to check the black money menace and a bill in this regard would be presented in the Parliament during the current session.
The law would provide for hefty penalties and imprisonment of up to ten years.
Speaking at an event organised by industry body Assocham, Das said that the black money law will be a very comprehensive piece of legislation, but added that the intention is not to create an environment of fear.
“We would expect our banks and financial institutions to be very reposnible… If we find there is an element of abetment provided by these institutions, naturally, that will attract provisions of the law,” he added.
“We want to have a non-adversarial tax administration. We do not want to do anything which vitiates the investment climate or which vitiates the ease of doing business or which affects businessman, industry and other people in carrying on their normal business activity,” he said.
The government will also give a one-time ‘short window’ to the holders of black money abroad to declare their wealth, pay taxes and penalty and escape prosecution under the proposed stringent law to deal with the menace.
The only advantage under the scheme would be an escape from prosecution. The source of income would have to be declared which would be throughly scrutinised, Das said.
“A one-time compliance window for a limited and short period of time will be given… The duration of short period will be worked out, will be specified in due course of time,” he said.
Talking about various provisions made in the Union Budget 2015-16, Das said that the overall focus was on reviving growth and it was aimed at job creation.
India is a young country and would remain young country for the next 50 years, he said.
On reduction of corporate tax from 30 per cent to 25 per cent over the next four years, Das said it will leave additional money in the hands of industry to make more investment and create jobs.
Speaking at the same function, CBDT chairperson Anita Kapur said that the intention of tax authorities is to reduce litigations and encourage investment.
UPA did not set up SIT as it wanted to ‘save’ somebody: PM
Targeting the previous UPA government, Prime Minister Narendra Modi today said it had not formed SIT on blackmoney because there was an attempt to “save somebody” and rejected suggestions that his dispensation was threatening the opposition on the issue.
He also rejected the opposition charge that his government was pro-corporate or pro-rich as he cited a number of schemes like Swacch Bharat Mission, Housing for all, toilets for government schools and Jandhan, questioning whether these were meant for the benefit of the rich or poor.
In his hour-long reply to the Motion of Thanks to the President’s Address in Rajya Sabha, he spoke about the issue of black money over which questions are being asked from his government about what has been done since last nine months.
“I believe that the dream of bringing black money would have been possible by now had an SIT been formed in 2011 when the Supreme Court had asked for it. That time the SIT was not formed because there was an attempt to save somebody,” he said.
Modi rejected Congress leader Anand Sharma’s charge that the government was threatening the opposition in the name of revealing the names of those having black money accounts.
He said he does not hold such a mindset of threatening others as it has never worked in a democracy and will never work. He said the law should be allowed to take its own course.
Modi recalled how threats of sending him to jail were issued when he was Chief Minister of Gujarat.
“Nobody’s threats work. Threats have neither worked in a democracy nor they can. For 14 years in Gujarat, I used to get letters, threats of sending me to jail every day. I knew what games were being played,” he said.
He said would not like to say anything more on this as he believed that this will come out some day when the history is written.
Hitting back at Congress, Modi reminded how threats were used against the opposition during the period of Emergency.
“Everybody knows who has the character and language of intimidation. Everybody knows what excesses were committed during the Emergency. What can be a bigger threat than this,” he said, targeting the Congress.
He asked the Opposition “not to put words in somebody’s mouth, which have not been said.”
Earlier, Sharma took umbrage to Modi’s remarks in Lok Sabha on the blackmoney issue when he had said that those having blackmoney would not be spared and later it should not be alleged that the government was “vindictive”.
Sharma viewed these comments as a threat and said his party was not afraid. Sharma had earlier taken umbrage of the Prime Minister’s remarks in Lok Sabha on the blackmoney issue.
“You said in Lok Sabha that you will not spare anybody. Has anybody given an application (to be spared)? Do not issue threats. Nobody is going to be scared by such threats. Fulfill the promises that you have made,” Sharma said participating in the debate.
The former Commerce Minister said if Congress had been scared, its government would not have signed treaties with 80 countries for bringing back black money.
Modi said his government believes that efforts should be made to bring back black money and the government was doing that. He listed a number of treaties signed with other countries and promised to fulfill his committment to bring back black money.
Countering the opposition charge that his government was pro-corporate, he listed a number of schemes initiated for the poor and said the government is moving towards serving the “last man in the row — daridra narayan (seeing God in the poor)”.
“Is the Swachchata Abhiyan for the corporates? The slumdwellers are yearning for quality of life. I talk of those poor when I talk about Swachchata. Is the Jan Dhan Yojana meant for the corporates? This is neither for the rich nor for the corporates.
“When I talk about toilets in government schools, what does it have to do with the rich and the corporates? It is for the poor, whose children go to government schools.
“When I talk of issuing soil health cards, is it working for the rich and the corporates? Will this money go in their accounts?
“Is our Housing for all scheme meant for making houses for the rich or the poor,” he asked.
Modi also defended coal auction saying that the states have such natural resources but still remain poor and the nation will not move forward till the states make progress.
Congress, Left and other Opposition parties have tried to paint the government as anti-poor and pro corporate on a number of issues including the recent controversial land ordinanance.
Modi’s strong counter signals the government resolve not to buckle under criticism of Opposition parties on his reform measures and carry forward the governments’ agenda.