New York: Finance Minister Arun Jaitley on Friday said the government will soon come out with the compliance window under the black money law for persons having illegal money stashed abroad to pay tax and penalty and come clean.
"The law has been passed... I go back and we are going to announce the compliance period," he said while during a talk organised by Columbia Business School.
The Minister also rejected the contention that the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 provides amnesty or immunity to persons holding undisclosed income overseas.
He said under the compliance window, Jaitley said a person holding unaccounted assets abroad will be given an opportunity to declare them and pay 30% tax and 30% penalty and come clean.
"Within the compliance period you will have to declare the asset and then you will get a time period to pay your taxation plus penalty which is 30 plus 30 of (asset at the market value)," he said.
The Minister further clarified that those who will not make use of the compliance window to come clean will have to pay a tax of 30%, penalty of 90% and face prosecution.
"Once the compliance window closes then you lose the opportunity of paying that tax and then the penal provisions take over. These penal provisions are instead of 30 plus 30 you pay 30 plus 90 which is a 120 which means you lose the asset and pay something more than that. Your domestic assets can be a source of recovery of that amount plus you are liable for prosecution," Jaitley said.
He said that the compliance window is not an amnesty scheme since it is a fresh tax which has been imposed.
"The problems with the amnesty schemes is that they are susceptible to a strong legal challenge and that scheme was challenged before the court on the ground that you are now putting a tax evader at par with an honest tax payer by giving him these kinds of schemes," he said.
"Any amnesty schemes today could run into difficulties because of some undertakings that the government in 1997-98 had given to the Supreme Court," he added.
The black money law will come into force from April 1, 2016.
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