Finance Minister Shri Arun Jaitley Outlines Measures to Curb Black Money in Budget 2015-16

The Finance Minister, Shri Arun Jaitley signaled the government’s intent to curb generation of black money in real estate in the Budget 2015-16. Presenting the Budget in the Lok Sabha today he proposed amendments in the Income Tax Act prohibiting acceptance or repayment of advance in cash of Rs. 20,000 or more for any transaction in immovable property. Penalties of equal amount will be imposed in case of contraventions.

In order to curb trade based money laundering, making false declarations/ documents in the transaction of any business relating to Customs (section 132, Customs Act) will be brought under the Prevention of Money Laundering Act as a “predicate offence”.

A Bill for a comprehensive new law to deal with black money parked abroad is likely to be introduced in the current session. Key features of the new law on black money are –

·         Evasion of tax in relation to foreign assets to have a punishment of rigorous imprisonment upto 10 years, be non compoundable, have a penalty of 300 % and the offender will not be permitted to approach the Settlement Commission.

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

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

·         Mandatory filing of return in respect of foreign asset.

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

·         Concealment of income/evasion of income in relation to a foreign asset to be made a ‘predicate’ offence under PML Act, 2002

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

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

Black Money Bill in the Current Session

The Union Finance Minister Shri Arun Jaitley has said that a Bill to enact a new law to deal with black money is to be introduced in the current session of the Parliament. In his Budget Speech in the Lok Sabha here today, giving details of proposed key features of the law, the Finance Minister said this is the first and foremost pillar of his tax proposals. Shri Jaitley said there will be a provision for rigorous imprisonment upto 10 years for concealment of income and assets and evasion of tax in relation to foreign assets. Such offence will be made non-compoundable. A penalty for such concealment of income and assets at a rate of 300% of tax is also proposed. Non-filing of return/filing of return with inadequate disclosures is to attract a punishment of rigorous imprisonment upto 7 years. Entities, banks, financial institutions including individuals are liable for prosecution and penalty. Any date of opening of foreign account would be mandatorily required to be specified by the assessee in the return of income. The Foreign Exchange Management Act, 1999 (FEMA) and prevention of Money-laundering Act, 2002 (PMLA) are also to be amended.

The Minister asserted that tracking down and bringing back the wealth which legitimately belongs to the country is his government’s abiding commitment to the country. He said several measures have been initiated in the last 9 month to effectively deal with the problem of black money.

Shri Jaitley said all this is aimed at job creation through revival of growth and investment in domestic manufacturing and ‘Make in India’, to benefit the middle class taxpayers and to improve the ease of doing business in a climate of minimum government and maximum governance.

The Finance Minister also said that a more comprehensive Benami Transactions (Prohibition) Bill will also be introduced in the current session of the parliament to achieve the objective of curbing black money. Elucidating details he said quoting of PAN is being made mandatory for any purchase or sale exceeding the value of Rs 1 lakh. There will be prohibition on acceptance or payment of an advance of Rs 20,000 or more in cash for purchase of any immovable property.

(Source- PIB-Press Released Dated- 28.02.2015)

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