A bill to deal with black money stashed abroad was passed by Parliament on Wednesday with government warning those having such assets to utilise the 'compliance window' or have sleepless nights once the global automatic information exchange system comes into effect in 2017.
Finance Minister Arun Jaitley said in Rajya Sabha that the new law, with stringent provisions, will help "squeeze" black money even as he underlined that the option of 'compliance window', which may run for a few months, was not an amnesty scheme.
"The world is no longer willing to tolerate tax havens which thrive in secrecy," he said, just before the 'Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Bill, 2015' was approved by the House, two days after the Lok Sabha passed it.
Jaitley, however, made it clear that the new law will not cover those having amounts equivalent to Rs 5 lakh in bank accounts abroad, which may belong to students or those working there.
The compliance window will provide an opportunity to people to come clean by declaring overseas assets and paying tax and penalty totalling 60 percent, Jaitley said while replying to a debate on the bill on the last day of the session. The timeframe for the compliance window will be notified as part of the rules.
"It is a taxation which is being imposed on an asset or an income outside. Since the tax has been imposed for the first time, we are giving you a compliance period where you pay 30+30 percent and then you can sleep well.
"And then also remember, if you don't use this compliance window now, time will run out because by 2017 there will be a realtime automatic disclosure of information taking place," he said.
The Bill, which seeks to unearth unaccounted funds and assets stashed by Indians abroad and provide for 120 percent tax and penalty in addition to 10-year jail term, will become law after getting assent of the President. The government has also armed itself to attach domestic property of equivalent value of such offenders.
Meanwhile, the extended Budget session of Parliament is done and dusted. Despite quite a few disruptions over various issues, the session saw a decent amount of business being conducted. Parliament sat for more than 30 days over a 2-month period, and saw 25 bills clearing both houses of Parliament to become law.
The bills include the Companies Act Amendment Bill, the Insurance Bill, the Mining Bill, Bill to strengthen the fight against black money, and amendments to the Prevention of Corruption Act. The government says Lok Sabha lost 6 hours and 54 minutes to disruptions, but made up for this loss. Rajya Sabha, meanwhile, lost 18 hours and 29 minutes to disruptions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
