Jaitley proposes 10-yr RI for foreign account holders hiding black money

Ajay Banerjee

Tribune News Service

New Delhi, February 28 

Stashing unaccounted money or “black money” in foreign accounts will now be tougher as it will attract penalties and even a 10-year jail.

In his Budget speech, Finance Minister Arun Jaitley today proposed two new laws and amendments to two others in order to deal with black money in foreign accounts and also wealth stashed away domestically in sectors such as real estate.

Jaitley admitted “limitations in the existing legislation”, a climb down from his July 2014 statement in the Lok Sabha when he said: “I can assure that you don’t have to wait for long to see that we have brought back the black money.”

Today, he told the Lok Sabha that a comprehensive new law on black money to specifically deal with such money stashed abroad was needed. “I will introduce a Bill in the current session of the Parliament,” he said.

Under the proposed law, a person concealing income and assets, and evading tax in relation to foreign assets will be liable for prosecution with rigorous imprisonment of up to 10 years. The offence will be made non-compoundable. Also, the tax evader has to face penalty at the rate of 300 per cent of tax on concealment of income and assets.

The same law will have a provision for seven years of rigorous imprisonment for non-filing of returns or filing of return with inadequate disclosure of foreign assets. Even if the income is not taxable, the beneficial owner will be mandatorily required to file tax returns.

To enable the administration of new Act on black money, the Prevention of Money Laundering Act, 2002, (PMLA) and the Foreign Exchange of Management Act, 1999, (FEMA) are proposed to be amended.

The PMLA will enable the enforcement agencies to attach and confiscate unaccounted assets held abroad and launch prosecution. This also enables attachment and confiscation of equivalent assets in India whereas the assets located abroad cannot be forfeited.

Similarly, the FEMA is also being amended and contraventions are also being made liable for levy of penalty and prosecution with punishment of imprisonment up to five years.

Also, the government has proposed the Benami Transactions (Prohibition) Bill to curb domestic black money, especially in property deals. “To curb domestic black money, a new and more comprehensive Benami Transactions (Prohibition) Bill will be introduced in the current session of Parliament. This law will enable confiscation of benami property, especially in real estate,” Jaitley said.