To check black money, a bill is likely to be tabled in Lok Sabha Friday providing with stringent provisions to prosecute those stashing illicit wealth abroad. The punishment may attract rigorous imprisonment up to 10 years.
The Undisclosed Foreign Income and Assets (Imposition of New Tax) Bill, 2015, also provides for a short window for those holding overseas assets to declare their wealth, pay taxes and penalties to escape punitive action.
Finance Ministry sources said that the Bill, which was approved by the Cabinet earlier this week, is likely to be tabled on Friday, which would be the last day of the first leg of the ongoing Budget session of Parliament, unless extended.
After being tabled, the Bill could be referred to the Parliamentary Committee before being taken up for passage.
The Bill also proposes to make concealment of income and evasion of tax in relation to a foreign asset a ‘predicate offence’ under the Prevention of Money Laundering Act, which will enable the enforcement agencies to attach and confiscate the accounted assets, held abroad and launch proceedings.
The Bill provides for a maximum of 10 years rigorous imprisonment for offenders who conceal income and assets and indulge in tax evasion in relation to foreign assets.
The offence will be non-compoundable and the offenders will not be permitted to approach the Settlement Commission for resolution of disputes. There will also be a penalty of 300 per cent of taxes on the concealed income and assets.
However, there will be a one-time window for the Income Tax assesses with overseas assets to declare their assets. The time frame of the short window will be notified after the passage of the Bill. According to sources, the window will be for a few months.
The Bill seeks to make non-filing of income tax returns or filing of returns with inadequate disclosure of foreign assets liable for prosecution with punishment of rigorous imprisonment of up to 7 years.
The proposal to come out with a new law on the black money was announced by Finance Minister Arun Jaitley in his Budget speech last month.
The issue of black money, especially alleged stashing of illicit wealth abroad in places like Switzerland, has been a matter of huge political debate for a long time. The government has also been under pressure to act on the issue of black money, as BJP had mounted a huge campaign during the Lok Sabha polls last year with an assurance to check this menace.