Black money compliance window: Government dares defaulters

Tribune News Service

New Delhi, October 2

A day after the black money disclosure scheme received poor response, the government has dared black money offenders holding assets abroad and said those who have not declared “will regret”.

“Black money compliance window: Those who did not declare have underestimated the power of information exchange. Will regret,” Economic Affairs Secretary Shaktikanta Das said in a tweet.

The information exchange refers to the pacts that India has signed with many countries under which tax-related information will be shared from the day they become effective.

The compliance scheme saw a weak response with only 638 declarations for overseas wealth totalling Rs 3,770 crore. The government had given a 90-day compliance window which closed on September 30 under the Black money (undisclosed foreign income and assets) and Imposition of Tax Act, 2015.

In the run-up to the campaign on declaring black money held abroad, the government had warned many times that failure to declare an undisclosed foreign asset will entail severe consequences under the Act, including higher penalty, prosecution, and may also result in forfeiture of assets under the Prevention of Money Laundering Act.

The government today reiterated its resolve to check black money. In another tweet, Das said, “Fight against black money is a part of economic reforms. As a country, we can’t allow ghost economy to undermine real economy and growth”.

Former Finance Minister P Chidambaram also took a swipe at the scheme’s lack of response. “It turned out to be a lemon!” Chidambaram tweeted.

“If the BJP wanted an apple to compare with an apple (VDIS) it could have designed an apple! Why did they design an orange (black money scheme),” Chidambaram tweeted.

The VDIS scheme was launched in 1997 when Chidambaram was the Finance Minister. It was an amnesty scheme for black money holders which got declarations of around Rs 33,000 crore with tax collections of more than Rs 10,000 crore.

For exchange of information, the government signed an agreement with the US on implementing the Foreign Account Tax Compliance Act (FATCA), which allows automatic exchange of tax information between the two countries with effect from September 30.