Email black money tip-offs, says Government, but no checks on deposits by political parties

On Friday, Revenue Secretary Hasmukh Adhia said if the deposits are in bank accounts held by political parties, they would attract no tax.

By: ENS Economic Bureau | New Delhi | Updated: December 17, 2016 9:49 am
Demonetisation, new currency notes, demonetisation-black money, whistleblower-black money, email id for whistleblower, India news, Indian Express Revenue Secretary Hasmukh Adhia. (File Photo)

The government has put out an email ID for whistleblowers to send information about possible conversion of black money by individuals, but it seems to have given political parties a free run with deposits of old currency notes in their accounts. On Friday, Revenue Secretary Hasmukh Adhia said if the deposits are in bank accounts held by political parties, they would attract no tax.

“Dekhiye, if it is a deposit in  the account of political parties, they are exempt. Lekin agar individual ke account mein, kisi ke bhi account mein jama ho raha hai, toh woh toh definitely the information will come on our radar (See, if it is a deposit in the account of political parties, they are exempt. But if it is deposited in any individual account, in anyone’s account, that information will definitely come on our radar.)

Finance Ministry officials said that the tax exemption to political parties will be subject to existing conditions in the law. According to Section 13A of the Income-tax Act, political parties are exempt from income tax provided they maintain books of accounts and record details of individuals making donations over Rs 20,000.

Separately, at a FICCI event, Finance Secretary Ashok Lavasa, when he was asked about deposits of political parties, said, “Jab tak 30 December tak purane note koi bhi jama kara sakta hai toh isme kisi ke khilaaf aisa koi vyavdhaan nahi hai ki falaana aadmi nahi kara sakta aur falaana kara sakta hai (Until December 30, anyone can deposit old notes. There is no provision that says so-and-so cannot deposit and so-and-so can). Anybody in India can deposit these notes in his account.”

Having collected around Rs 1 crore in every search-and-seizure and admissions of Rs 2,600 crore of concealed income through 295 surveys, the tax department on Friday announced commencement of the second opportunity. Beginning Saturday, Adhia said, citizens can come clean with their unaccounted wealth through the Pradhan Mantri Garib Kalyan Yojana (PMGKY) till March 31, 2017.

Declarations made in the 105-day scheme will be subject to total 49.9 per cent of tax, penalty and surcharge, along with the declarant having to deposit 25 per cent of the undisclosed income in an interest-free deposit scheme for four years. Adhia said that black money cannot be converted to white unless taxes on undisclosed assets are paid and full investigation is concluded. Adhia announced an e-mail ID — blackmoneyinfo@incometax.gov.in — for whistleblowers to send information about possible conversion of black money.

Central Board of Direct Taxes (CBDT) chairman Sushil Chandra said the tax department was also receiving a lot of real-time information, which was being matched with existing profiles of tax assessees. He said that since the November 8 announcement of discontinuing high-denomination currency notes, the department had seized Rs 393 crore after conducting 291 searches and seizures. Of this, Rs 316 crore were cash seizures, including Rs 80 crore in new currency notes. Apart from this, jewellery worth Rs 77 crore was seized.

“Deposits in bank accounts are being watched and, therefore, they should come very clean under this scheme which is the last window available for anyone,” Chandra said, adding that around 3,000 notices have already been issued based on the deposits made after November 8.
Emphasising that scrutiny of data will be “non-intrusive” so that there is no fear of ‘Inspector Raj’, Adhia said that the government would also take help from professional agencies to analyse information of deposits made post the currency discontinuation decision.

“We want people to come forward and declare on their own unaccounted cash/deposit. The moment all the deposits come by December 30, we will analyse the voluminous data that we get. We would scrutinise all the data in a non-intrusive manner so that the fear of ‘Inspector Raj’ is not there in the minds of people,” he said.

Unlike the previous four-month long tax compliance window — Income Declaration Scheme (IDS) — which ended on September 30, declarants under the PMGKY will have to produce a receipt ensuring that they have paid taxes and penalties, before filing a declaration. Under IDS, declarants made their disclosures before payment of tax and penalty. The disclosure scheme is part of The Taxation Laws (Second Amendment) Act, 2016, approved by the Lok Sabha earlier this month and has the President’s assent.

Adhia said that while declarations made under the new taxation and investment regime of PMGKY will not be admissible as evidence under different tax Acts such as Central Excise, Wealth Tax or Companies Act, the declarants will not enjoy any immunity under existing criminal laws.

He said that if the undisclosed cash or deposit in accounts was not declared under the PMGKY scheme, it will attract tax, surcharge and cess totalling 77.25 per cent of the income if it is declared in the income tax returns. In case the disclosure is not made either using the scheme or in returns, a further 10 per cent penalty on tax will be levied followed by prosecution, he said. Under the scheme, the income declared will not be included in the total income of the declarant under the Income Tax Act for any assessment year.

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  1. A
    Abhinav Gour
    Dec 17, 2016 at 12:23 am
    99% of black money are with politicians . The remaining is in safe havens. What a nice way for politicians to get away from scrutiny.
    Reply
    1. B
      Bipin Bhardwaj
      Dec 17, 2016 at 4:15 am
      The most corrupt, roots of the Balk money and corruption is being protected by the Govt, this is another feather on the cap of the Govt facilitating money laundering, converting Black money into white along with its criminal P notes facilitating Black money being invested as FDI . So the fraud of Demonetization for fooling and deceiving people and the w country.
      Reply
      1. O
        Onkar Singh
        Dec 17, 2016 at 5:46 pm
        Is this to facilitate Bjp which deposited in crores between 1 st November and 8 th November,2016,in Kolkata and elsewhere.One more bureaucrat colluding in the cover up of the corrupt BJP and corrupt Modi and his cohorts.And these guys want to fight corruption and black money,my foot!!
        Reply
        1. K
          Krishna
          Dec 16, 2016 at 5:39 pm
          Rahul and Modi meet - "the deposits are in bank accounts held by political parties, they would attract no scrutiny".
          Reply
          1. K
            Krishna
            Dec 16, 2016 at 5:38 pm
            Shame on India "the deposits are in bank accounts held by political parties, they would attract no scrutiny"
            Reply
            1. K
              Kalidas
              Dec 17, 2016 at 12:59 am
              What? Modi was fervently calling all partiesv as bunch of thugs, chor, black money holders, traitors and anti nationals. lt;br/gt;lt;br/gt;You and me can not pay hospital bills or petrol charges ir school fees in old ₹500/1000, so why these political parties, the hotbed if corruption, are exempted? अरे भाइ ये तो बताओ, मोदीजीने गुलाँट क्युँ मारी? Read this. lt;br/gt;lt;br/gt;One, yesterday's deal meeting with Rahul hi. Two, most important is the resources requirements in elections in UP, Punjab, Goa, Gujarat etc.lt;br/gt;lt;br/gt;No election can be fought without money. When BJP approached large donors for contributions, they said qualifying No Money. We can pay you in old notes, if you wish, they said. So, he opened floodgates to all parties and their workers. lt;br/gt;lt;br/gt;Now, he can not exempt only BJP donors. So, he exempted all political parties. Now, Rahul, Mamta, Lalu, Nitish, etc. can be pacified on condition of anonymity. Expect every one to tone down opposition with exception if Kejriwal. He is too pure to spoil.lt;br/gt;lt;br/gt;तो मोदीजीने आखीरमैँ अपनी जात दिखा दी. यह सब नौतँकी करनेकी क्या जरुरत थी? कहेते है, कौऐ सब काले होते है - कश्मीरके हो या कन्याकुमारीके. lt;br/gt;lt;br/gt;This is my final comment. There us no point to write constructive. I am in USA for 5 years after living in Hong Kong for 32 years. I do not think our politicians can improve - it requires total blood transfusion and even bone marrow.
              Reply
              1. K
                Kalidas
                Dec 17, 2016 at 12:18 am
                Wrong essment. Large tax payers and avoiders (who are called black money holders ) are same enyv- 2 into 1. They do pay some taxes and avoid some. It is not that they avoid taxes altogether. lt;br/gt;lt;br/gt;For instance, when one sells property with 60:40 agreement, that is, 60% white and 40% black. They pay taxes on white portion but black portion remain untaxed. lt;br/gt;lt;br/gt;It is not that the seller wants to avoid tax on black portion. He wants to sell entire property in white and pay higher taxes accordingly, but the buyer can not pay 100% in white. He therefore request agreement as per Ready Reckoner, which will be known as Agreement Value, and pay remaining under the table.lt;br/gt;lt;br/gt;The seller has no choice. Either he accepts the deal or forget about it. Even if he waits for another one year, he will not find another buyer. He has yo accept as"fait accompli"
                Reply
                1. M
                  MyTake
                  Dec 16, 2016 at 8:19 pm
                  Why the lodging of complain can't be made anonymous? That will empower people more!
                  Reply
                  1. O
                    Ompuri
                    Dec 16, 2016 at 7:03 pm
                    Politicians in India are the most corrupt and horrible people. They are in the business of politics to make money. If fekoo is serious about black money why not bring law of limited transparent political funding? Bring law where all the goons in parliament barred for life if convicted of any financial or civil crime. Modi will never bring any of those changes because himself and his party will be the first to be convicted of those crimes.
                    Reply
                    1. P
                      Piyush
                      Dec 17, 2016 at 6:55 am
                      Politics of loot must stop...political party must pay tax
                      Reply
                      1. P
                        Pradeep Mishra
                        Dec 17, 2016 at 12:08 pm
                        Politician and bureaucrats along with bankers shows their true color post demonetisation and seems to function counter to the national interest. Political parties should be put under scrutiny. After all they are not supreme.
                        Reply
                        1. R
                          Ranveer
                          Dec 18, 2016 at 10:48 am
                          this is an perfect example of how a political party in power can make gold out of the poor's bones. Poor people suffered patiently for the sake of purported good but now it seems that it was a big conspiracy. Opposition is not able to project it because of emasculated leaders (like Rahul who can't even articulate his name smartly). Best course for the congress would be to kick-out RG and elevate a leader of fairly good IQ in leadership position.
                          Reply
                          1. A
                            Araknid
                            Dec 16, 2016 at 6:10 pm
                            No political Party is ic to keep account in India.BJP HAS MULTIPLE ACCOUNTS IN LIECHTENSTEIN MANAGED BY SWISSMA SWARAJ.
                            Reply
                            1. T
                              Tax payer
                              Dec 17, 2016 at 2:42 am
                              Congress treated people like deaf, blind and mute. BJP is even worse treats people like cattle and sheep.
                              Reply
                              1. P
                                Praful Vora
                                Dec 16, 2016 at 10:16 pm
                                So political partyworkerput20009 everyday for1000timesin party account and get job in party and get cash back without showing the income . SAD
                                Reply
                                1. A
                                  Aadinath
                                  Dec 17, 2016 at 1:25 am
                                  Gujju Gujarat Macre accuse as PM. Gujju as RBI Governor. Gujju as CBI chief. Is country slowly turned into Dictatorship and Tyranny.
                                  Reply
                                  1. A
                                    ams
                                    Dec 16, 2016 at 8:53 pm
                                    bhakt a $$ will be set on fire. Doubtful any bhakt will comment on this. Waiting for highly fakely innovative bhakts to put a positive spin on this
                                    Reply
                                    1. A
                                      Anil
                                      Dec 17, 2016 at 3:59 am
                                      Not surprised these bugger politicians can do anything to make money...Only common man liye you and me is affected. Modi is no different from others...Only Talks, Talks and Talks...Mitron me Apki ke Baja ke dum lunga...
                                      Reply
                                      1. A
                                        Ashoke
                                        Dec 16, 2016 at 5:26 pm
                                        Already 47 whistle-blowers have died untimely and mysterious death in Madhya Pradesh. Another hog-wash by government lead by Mr. Narcissist Mythomaniac.
                                        Reply
                                        1. A
                                          Ashoke
                                          Dec 16, 2016 at 5:28 pm
                                          Clever front-bench people of भारतीय जुा पार्टी knew about the impending demonetisation of Mr. Narcissist Mythomaniac. They easily converted their unaccounted money through high density ₹2000 notes.
                                          Reply
                                          1. A
                                            Ashoke
                                            Dec 16, 2016 at 5:36 pm
                                            Demonetisation can not be implemented without going through the bank. Then what was the need of secrecy, by putting 65% of India's potion running from pillar to post for their own money to buy daily needs?
                                            Reply
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