Lok Sabha clears Bill to check black money

 Aditi Tandon

Tribune News Service

New Delhi, May 11

Indians holding undisclosed income and assets abroad are set to face hefty financial and criminal penalties with the Lok Sabha tonight passing a historic Bill to deter evaders from stashing black money overseas.  

Tax evasion on foreign assets will carry a punishment of three to 10 years rigorous imprisonment with Finance Minister Arun Jaitley telling the House that India had joined the global efforts under G-20 for automatic exchange of information on black money holders abroad - something which will materialise by 2017. "Time for black money-holders is running out," Jaitley said ahead of Lok Sabha approving the Undisclosed Foreign Income and Assets (Imposition of Tax) Bill-2015 by a voice vote.

The approval came after Jaitley rejected opposition Congress' charge that the Bill had "fatal flaws" and should be sent for parliamentary committee review.  "For 11 months you have been taunting us for not taking steps on black money. Now that we have brought the Bill, don't develop cold feet, walk the talk rather than getting into technicalities of referring the Bill to a committee which will delay a crucial law and encourage further flight of capital," FM told Congress' Deepender Hooda who then supported the Bill.

The Bill which Speaker Sumitra Mahajan, on government request, ruled to be a Money Bill (a Bill which Rajya Sabha can't amend and must return to LS within 14 days of receipt with or without recommendations), offers a one-time compliance window to holders of undisclosed assets abroad to declare assets and legalise them within the window by paying 30% tax on asset value and 30 pc penalty. 

After the window closes, they'll be charged 30% tax and 90% penalty and can face jail. 

Jaitley added that the government had amended domestic laws to ensure that 120 pc penalty defaulters need to pay can be recovered by attaching their domestic assets if they have disposed of foreign assets.

 "This is happening for the first time. We have quietly amended the Prevention of Money Laundering Act to make keeping of assets abroad a predicate offence liable for prosecution. We can realize 120 pc penalty amount from defaulters by attaching their Indian assets if foreign assets have been sold," Jaitley said. He clarified that the law won't apply to Indians students abroad or working professionals and will target only the "big fish" by covering holders of minimum Rs five lakh in foreign accounts and not those with lesser monies.