The government is likely to table in the Lok Sabha tomorrow a Bill to make non-disclosure of overseas income and assets a predicate offence that will attract punitive action including upto a 10-year jail term.
The Bill will provide a short window to overseas asset holders to declare their wealth, pay taxes and penalties to escape punitive action.
The Undisclosed Foreign Income and Assets (Imposition of New Tax) Bill, 2015, according to Finance Ministry sources, will be tabled on Friday– the last day of the first leg of the Budget session of Parliament.
The first leg will end tomorrow unless extended. After being tabled, the Bill could be referred to the Parliamentary Committee for scrutiny before being taken up for passage.
Earlier this week, the Cabinet approved the Bill which provides for a maximum of 10 years rigorous imprisonment for offenders who conceal income and assets and indulge in evasion in relation to foreign assets.
Under the provisions of the new Bill, the offence will be non-compoundable and the offenders will not be permitted to approach the Settlement Commission for resolution of disputes.
There will also be a penalty at the rate of 300 per cent of taxes on the concealed income and assets.
The Income Tax assesses, who have overseas assets, will get a one-time opportunity for declaring them. The time-frame of the short window will be notified after the passage of the Bill. According to sources, the window will be for a few months.
The proposal to come out with a new law on the black money was mooted by Finance Minister Arun Jaitley in his budget speech.
The Bill seeks to make non-filing of income tax returns or filing of returns with inadequate disclosure of foreign assets liable for prosecution with punishment of rigorous imprisonment of up to 7 years.
“Concealment of income and assets and tax evasion in relation to foreign assets will be prosecutable with punishment of rigorous imprisonment upto 10 years,” as per provisions of the Bill.
The government has been under pressure to act on the issue of blackmoney stashed abroad as the BJP had mounted a huge campaign during the Lok Sabha polls last year with an assurance to quickly repatriate such illegal wealth.
Concealment of income or tax evasion in relation to a foreign asset will be made “predicate offence” under the (Prevention of Money Laundering Act) PMLA, enabling enforcement agencies to attach and confiscate such assets.
The proposed new legislation will provide that income in relation to any undisclosed foreign asset or undisclosed income from any foreign asset will be taxable at the maximum marginal rate. Exemptions or deductions, which may otherwise be applicable in such cases, shall not be allowed.
Beneficial owner or beneficiary of foreign assets will be mandatorily required to file returns, even if there is no taxable income, says the Bill.
Date of opening of foreign account would be mandatorily required to be specified by the assessee in the return of income.