Strict norms will kick in after the expiry of the threemonth-long ‘compliance window’ to declare assets in foreign shores ends Wednesday (September 30) even as the government ruled out any extension of the scheme.
The penalties include a hefty 120% of the tax amount due and a jail term of up to 10 years for holding undisclosed foreign assets.
The three-month compliance window scheme provided protection against prosecution by declaration of the assets and paying 60% tax and penalty. The Central Board of Direct Taxes has already warned that all “consequences” of law will follow and the taxman will go after black money hoarders who do not declare their illegal funds by Wednesday.
According to a top government source, till September 23, not more than 30 entities had reported their foreign investments which totalled about Rs.2,500 crore. On a comparative scale, a tax amnesty scheme called the Voluntary Disclosure of Income Scheme (VDIS) in 1997 had fetched over Rs.10,000 crore.
The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, came into effect on July 1 after being notified on May 26.
Significantly, the anti-offshore tax evasion and black money detection pact between India and the US — Foreign Account Tax Compliance Act (FATCA) — will also become operational from Wednesday. The information that would be shared between banks, mutual funds, insurance, pension and stock-broking firms of the two countries will include personal details of entities, their tax identification numbers, transaction details including all receipts accruing from interest, dividends, insurance policies, sale of financial or other assets, and credit balances in accounts. The US has already inked pacts with 110 jurisdictions to implement the FATCA.
Hindustan Times, New Delhi, 30th sept. 2015
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