The chief of SIT on black money feels it will be ‘difficult’ for those holding untaxed assets to avoid disclosure under the ongoing one-time compliance window opened by the government after the limited sucess of a similar scheme launched last year for those with tainted money overseas.
SIT Chairman Justice (retd)M B Shah said the Income Tax department has “tightened each and every angle” under the current scheme, and hence evading disclosure under this scheme will be ‘hundred per cent’ difficult.
“The last such scheme was not successful… rather it was successful to some extent in the sense that attention was drawn prominently that if something is found (at a later stage) they will be subsequently prosecuted… to some extent it had a deterrent effect.
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“Now, this time it will be difficult (for evaders),” Shah told reporters.
He said the issue of P-notes (participatory notes) has also been “controlled” to a large extent and hence it will not be easy for tax evaders to hide their assets and funds from agencies like the Income Tax department and they will now have to disclose it to them.
The SIT had suggested in 2015 that market regulator SEBI put in place regulations that will help identify individuals holding P-Notes or offshore derivative instruments (ODIs), and take other steps required to curb black money and tax evasion through the stock market route.
P-Notes are used by a large number of foreign investors to park funds in the equity market without disclosing their identity to the Sebi.
Talking about the probe in the ‘Panama Papers’ issue, the SIT Chairman said investigating agencies are facing “difficulties” in reaching to the bottom of the matter as they are not getting specific account numbers and people named in the list are also “not disclosing” the details to the taxman.
On the issue of bank loan frauds, Shah said it was the domain of the RBI which can act and comment upon them.
Vice Chairman of the SIT Justice (retd) Arijit Pasayat also said they were “hopeful” that the one-time compliance window provided to domestic black money holders will be successful.
On ‘Panama Papers’, Pasayat said the follow up action of probe agencies is “bound” to produce good results.
Under the compliance window called Income Declaration Scheme (IDS), income as declared by the eligible persons, would be taxed at the rate of 45 per cent which is 30 per cent plus a ‘Krishi Kalyan Cess’ of 25 per cent on the taxes payable and a penalty at the rate of 25 per cent of the taxes payable on the income declared.
It opened on June 1 and will close in September. Taxes have to be paid by November 30.
The scheme was announced by the government with an aim to squeeze out black money from the domestic economy.
The government had come out with a similar scheme for Indians holding undisclosed income abroad in 2015.
The current scheme will apply to undisclosed income, in the form of investment in assets or otherwise, pertaining to Financial Year 2015-16 or earlier.
The declarations under the IDS can either be made online on the official e-filing website of the IT department or before the various regional Principal Commissioners.