Skip to main content

Bill to Counter Laundering of Demonetised Notes Passed in LS

Amended law provides those with unaccounted cash or deposits of cancelled .? 500 and .? 1,000 notes to pay 50% tax; plan to use funds from deposit scheme for pro-poor programmes

New Delhi: The Lok Sabha on Tuesday passed the Taxation Laws (second) Amendment Bill, which provides another chance for people with unaccounted cash to come clean. The Taxation Laws (Second Amendment) Bill, 2016 was passed by a voice vote in a complete din without any debate. The amended law provides those with unaccounted cash or deposits of cancelled 500 and 1,000 notes to pay 50% tax and come clean, or else, if caught, face a much harsher penalty and possible prosecution.

A quarter of the amount declared will be locked up for four years in interest free deposits, leaving such declarant with only 25% of funds for immediate use.

Finance minister Arun Jaitley said the government had made these changes after it was seen that people were trying to launder the demonetised currency. “It was seen after November 8 that many people were trying to illegally con- vert those currency notes that were not legal tender,” he said, moving the bill for consideration and passage amid fierce sloganeering by the opposition.

“It will give means to the Government of India to run schemes like Garib Kalyan Kosh...I urge the House to accept the amendments,” he said.The government proposes to use the funds from the deposit scheme for pro-poor programmes including providing subsidy for housing. Jaitley said that as per the amendment proposed, those caught with unaccounted cash or deposits will have to cough up 60% tax plus penalties, which will come to 85%. They also run the risk of prosecution.

The law also provides for imposing up to 60% (tax + penalty) — if it’s admitted and return is filed — and 90% (tax + penalty) on cash seized in searches. Opposition members said the bill could not be discussed before the debate on demonetisation as the measure was a follow-up of the note ban decision.

Congress leader Mallikarjun Kharge and TMC's Sudip Bandhopadhyay said the two — adjournment motion on demonetisation and the income tax amendment bill — can be discussed together as the issues were similar. Speaker Sumitra Mahajan said that since the bill is of urgent public importance, it has to be passed immediately. She said that though she wanted a debate “it is impossible” because of the behaviour of the opposition members.

She also disallowed some amendments moved by opposition members as they required approval of the President which could not be obtained. Two amendments by N K Premchandran (RSP) and B Mahtab (BJD) were allowed. While Premachandran refused to move the amendment as he was shouting slogans, Mahtab's amendment was negated by a voice vote.

30TH NOVEMBER, 2016, THE ECONOMIC TIMES, NEW DELHI

Comments

Popular posts from this blog

Govt’s gamble on GST cuts: What do the bond and currency markets signal?

  It’s not just humans who suffer from cognitive biases; markets do too. Interestingly, different financial markets exhibit distinct biases, each interpreting events through its own prism of prejudice. Take the recent announcements on GST reforms: equity markets have chosen to view them through the lens of growth, while bond and currency markets are focusing on potential macroeconomic risks—fiscal pressures and current account challenges. So, which lens captures the true pulse?Equity markets may be right in expecting GST reforms to revive consumption, which has remained lacklustre for a while. But the key question remains—will this revival come at the cost of broader macro stability?It is well known that consumption stocks have rallied since the GST rationalisation announcement. But what about bond markets? What signals are they sending since this rejig was announced from the ramparts of the Red Fort?The signs aren't encouraging. Bond prices have slumped and yields have surged sinc...

Luxury carmakers urge clarity on GST rates to boost festive season sales

  A clear picture regarding new GST rates at the earliest will help the overall auto industry, including the luxury car segment, to regain momentum in the ongoing quarter, which generally sees enhanced sales on account of the festive season.The high-powered GST Council, chaired by Finance Minister Nirmala Sitharaman, will meet on September 3-4 to discuss moving to a two-slab taxation.In an interaction with PTI, BMW Group India President and CEO Hardeep Singh Brar said the recent speculation about the change in GST rates has caused uncertainty in the minds of consumers.Consumer interest and demand is strong, but they (prospective buyers) have adopted a wait-and-watch approach, and this delayed decision-making is impacting new vehicle sales at a certain level, he noted."Expediting clarity on GST rates is essential to get back to speed and ensure the auto sector's contribution to economic growth during this quarter is robust," Brar stated.He also hoped that the sustainable p...

Sebi proposes tighter norms for green bond third-party reviewers

  Sebi on Friday said it has proposed to tighten the norms to appoint independent third-party reviewers or certifiers for green debt securities to align them with requirements for other ESG-linked bonds.In a draft circular, Sebi said that the current norms for green bonds, introduced in February 2023, lack detailed requirements around reviewer independence, conflict of interest mitigation, and disclosure standards that are now in place for other ESG-linked securities under a June 2025 circular.The regulator's latest proposal seeks public comments on a revised framework that would bring parity by incorporating comprehensive criteria for third-party certifiers of green bonds on non-convertible securities.Under the proposed norms, issuers of green debt securities will need to appoint reviewers who are independent of their management, directors, and key managerial personnel. These reviewers will be remunerated in a way that prevents any conflicts of interest and possess relevant expert...