Black Money

In the budget 2015-16, there is a provision of a Bill for a comprehensive new law to deal with black money parked abroad. The said bill may be introduced in current session of the Parliament.

Key features of new law on black money

1)      Evasion of tax in relation to foreign assets to have a punishment of -

                                i.            rigorous imprisonment upto 10 years

                              ii.            non-compoundable

                            iii.            penalty rate of 300%

                             iv.            the offender will not be permitted to approach the Settlement Commission.

2)      Non-filing of return/filing of return with inadequate disclosures to have a punishment of rigorous imprisonment upto 7 years.

3)      Undisclosed income from any foreign assets to be taxable at the maximum marginal rate.

4)      Mandatory filing of return in respect of foreign asset

5)      Entities, banks, financial institutions including individuals all liable for prosecution and penalty.

6)      Concealment of income/evasion of income in relation to a foreign asset to be made a predicate offence under PML Act, 2002.

NOTE : Under the PML Act, 2002, the Scheduled Offence is called Predicate Offence and the occurrence of the same is a pre requisite for initiating investigation into the offence of money laundering.

7)      PML Act, 2002 and FEMA to be amended to enable administration of new Act on black money.

Apart from the new law, the following measures are being taken by the government to curb black money :

1)    Benami Transactions (Prohibition) Bill to curb domestic black money to be introduced in the current session of Parliament.

2)    Acceptance or re-payment of an advance of ` 20,000 or more in cash for purchase of
immovable property to be prohibited.

3)    PAN being made mandatory for any purchase or sale exceeding Rupees 1 lakh

4)    Third party reporting entities would be required to furnish information about foreign
currency sales and cross border transactions.

5)    Provision to tackle splitting of reportable transactions.

6)    Leverage of technology by CBDT and CBEC to access information from either’s data
bases.