Govt to ensure safeguards to make sure black money law not used to harass overseas students: Shaktikanta Das, Revenue Secy
NEW DELHI: India will seek to apply its proposed law on black money held abroad fairly, making sure that its stringent provisions aren’t used to harass students, research scholars and professionals going overseas for short stints. “There will be suitable safeguards,” Revenue Secretary Shaktikanta Das told ET in an interview.
“There are so many Indian students who study abroad or professionals who go on shortterm assignments or consultancy. It’s not the intention of the government to cause difficulty for these kinds of people.”
Under the proposed legislation, non-disclosure of overseas assets will be a criminal offence with sentences of as much as 10 years of rigorous punishment, Finance Minister Arun Jaitley said in his February 28 Union Budget. It will only offer a brief window as a last chance for the declaration of assets and payment of tax, with no chance of an amnesty.
The new law will cover all assets, including works of art, which will need to be disclosed to the tax authorities. India will start receiving information on an automatic basis from the US from 2017 under the US Foreign Account Tax Compliance Act, or FATCA, besides other nations under global accords.
The tax authorities will thus get details on overseas holdings of Indians, making it difficult to hide funds in bank accounts or assets overseas. This information exchange will also cover trusts and other structures that are popular in tax havens as a means of concealing the ultimate beneficiary. “All assets will be covered. If you have declared the asset in your incometax return, paid tax either in this country or the other country, there is no reason to worry,” Das said. “Any legitimate activity will not be interfered with. It becomes illegal when it is not disclosed, and it’s not disclosed adequately, sources are not disclosed or the sources are dubious.” Tackling black money is a priority for the Narendra Modi government, having been a key plank of the BJP’s election campaign. The Modi cabinet’s first decision was to set up a special investigation team to look into black money. Das said the government had no intention of creating an atmosphere of fear.
“Any legitimate business will not be affected. Our whole approach of non-adversarial tax regime will continue. The tax department will continue to be friendly and there will not be any arbitrary exercise of power. There will be suitable internal safeguards and controls will be provided to prevent any misuse or arbitrary exercise of power by our officials,” he said.
SMALL WINDOW
The government plans to introduce the new bill in the current session of Parliament so that it can be taken up for approval after the recess and implemented in July. Though the law will come into effect from the date of notification, it will cover assets created before that date as well.
“The details are being worked out. It will be spelt out when the bill is moved in Parliament but there will be an opportunity (for) people who own undisclosed assets and bank accounts to come clean,” Das said. “Detailed procedural guidelines will be issued. They will declare their assets, pay the tax, required penalty and other charges and that’s it. It will be for a short and limited period of time.”
After that, the law will be vigorously applied but without harassing genuine taxpayers, he said. Asked about black money salted away within the country, he said current laws were fairly effective and the proposed legislation against benami transactions would curb the practice of property being held in the names of employees in order to evade taxes. Property will be seized or confiscated in such situations, Das said, pointing out that citing the permanent account number (PAN) has been mandatory for any transaction of more than Rs 1 lakh and advances on immovable property have been restricted to Rs 20,000 in the Budget.
