‘Govt is giving a one-time chance to come clean on black money’https://indianexpress.com/article/business/business-others/govt-is-giving-a-one-time-chance-to-come-clean-on-black-money/

‘Govt is giving a one-time chance to come clean on black money’

The proposed law on black money will allow the tax authorities to attach domestic property of equal value.

The proposed law on black money will allow the tax authorities to attach domestic property of equal value of the suspect, said revenue secretary Shaktikanta Das, adding that the tax department is also strengthening its internal sources of information on assessees. In an interview with Surabhi, Das said corporate tax rates will be evenly reduced in phased manner to help improve India’s competitiveness. Excerpts:

What was the imperative for the two proposed laws on black money?

While implementing the anti-evasion and anti-black money measures, we found that the law on domestic black money is fairly strong. But even here, we have proposed the Benami Transaction Bill. But with regard to black stashed abroad by Indian taxpayers, we found that there was a need to improve the existing law. Prima facie, it is not illegal to have a foreign account or own assets outside India but it becomes illegal when you don’t disclose it, don’t pay tax on it or you finance it from doubtful, dubious sources or undeclared sources. In such cases, if we have to confiscate the property outside, we have to go through a long process — we have to get a court order, then approach the foreign authority, then the person can go on appeal there and delay the process. So we have brought in this legislation to attach immediately and confiscate assets of equivalent value in India. But let me make it very clear that there will be internal safeguards to ensure there is no arbitrary exercise of power.

When will the Bills be introduced in Parliament?

The new Bills will be introduced in the current session of Parliament and our effort is to have it enacted and passed in Parliament during this Budget session.

Is the voluntary compliance an amnesty scheme?


It is not an amnesty or VDIS. It is a one-time compliance opportunity for a limited time period wherein people can declare their assets, pay the penalty, and come clean and be protected against prosecution. But once this compliance window is closed, the new law will be enforced. From 2017 onwards, the automatic exchange of information will come into force amongst all countries. So if someone is hiding money, we will get the information and under the law, we can go back 16 years to re-open the cases.

Are you also looking to strengthen internal sources of information?

We are doing that simultaneously. With wealth tax being abolished, suitable changes will be made in the tax returns to capture that additional information. Also, the finance minister has announced the sharing of data on an online basis by CBDT and CBEC to facilitate a coordinated approach. We have also internally developed an inter-agency mechanism to ensure sharing of information. There will be 360 degree profiling of sectors and suspect entities and individuals.

Are the tax revenue estimates over optimistic? 

The tax estimates are very realistically prepared. For direct taxes, the revised estimates for the current fiscal present a growth of 10.5 per cent over last fiscal’s actual collection. The Budget estimate for 2015-16, is a 13 per cent growth. With the kind of GDP growth we are expecting, it is very much achievable. In indirect tax, the revised estimate presents a growth of 9 per cent over last year’s actual collections. The budget estimate of next year represents a 19.5 per cent increase. It may look very steep but if you take into account four factors — higher coal cess, higher rate of service tax, the tax incentives that were given to automobile industry and capital goods as well as the excise duty and the cess on petrol and diesel, will also help collections.

What is the road map for corporate tax reduction?

India has to have a competitive environment to facilitate growth and create more jobs. Corporate tax rates will be evenly reduced in phased manner over four years starting from 2016-17 and it will be accompanied by phased elimination of exemptions. The roadmap on elimination, which we are working on already, will be announced during the course of the year.