Revenue secretary Shaktikanta Das has done well by making it clear now that full confidentiality will be maintained about those disclosing unaccounted overseas wealth under the black money compliance window. His statement last week did indicate the possibility of such information being revealed in the public interest.
The government must understand that it is the high-handedness of the income tax department and mishandling of the tax issues that has resulted in huge litigation and as the majority of the cases lack objectivity in the assessment, the department’s record of winning cases is poor. If the Black Money Law is not handled judiciously, it will add to the current mess, which needs to be cleaned up fast.
Those thinking of utilising the three-month compliance window available till September 30 for disclosing their unaccounted wealth stashed abroad will do so only if they are certain that the information will not be used for harassment. The income tax department is required to keep individual taxpayers’ information confidential at any cost and the Black Money Law provisions should not be seen differently.
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In any case, once the prescribed 30% tax and an equal amount of penalty is paid on the undisclosed income, the person has to be treated as a normal taxpayer. Of course, those who will not utilise this window and will get caught under the Black Money Act after April 1, 2016, will have to face the consequences — a 120% tax payment with prosecution — that in itself would mean making all the information public. But, creating havoc about the law will serve no purpose and the revenue secretary must have avoided making confusing statement about the sharing of information in public interest.
The income tax department has already messed up critical issues like transfer pricing, retrospective amendments and MAT on FPIs, and it should not be allowed to add the Black Money law to this list. The government must create a system to deal with the Black Money cases separately if it is serious about making this law a serious deterrent.