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The Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015, was passed by the Lok Sabha on Monday, after the government rejected the Opposition's demand to refer it to the Parliament's standing committee on finance.
The Bill, commonly referred to as the black money Bill, provides for 120 per cent tax and penalty, besides criminal prosecution. It will now go to the Rajya Sabha, which does not have the power to reject the Bill because it was notified as a money Bill.
Allaying the concerns raised by some members, Finance Minister Arun Jaitley assured the House that innocent people would not be harassed under the proposed law.
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He said there would be a short compliance window for persons having undisclosed income abroad to come clean by paying 30 per cent tax and 30 per cent penalty. He said it could not be termed an amnesty scheme. "Amnesty scheme has a provision of naming and shaming. There is no provision here."
Jaitley said those involved in terrorism and money laundering would not be allowed to make use of the compliance window to come clean.
He said there could be a two-month window to declare overseas assets and within six months, one would have to pay tax and penalty.
"Once the compliance window closes, anyone found having undeclared overseas wealth would be required to pay 30 per cent tax, 90 per cent penalty and face criminal prosecution," he said, while winding up the debate on the Bill, which was later approved by the House. The Bill provides for rigorous imprisonment of up to 10 years for offenders.
A separate benami Bill would soon be brought before the Cabinet to tackle domestic black money.
Rejecting the Opposition's charge that the stringent provisions could result in harassment of innocent people and students, he said, "We don't want to proceed against trivial violations. But, the big fish must not get away... Let us not fire from the shoulders of these innocent students in order to make sure no harsh action is taken on the big fish."
He said no action would be taken against persons having Rs 5 lakh or an equivalent amount in their overseas bank accounts.
"We will make sure the statutory guidelines are also issued by the CBDT (Central Bureau of Direct Taxes). We will make sure no innocent person, who does a lot of international travelling, is not covered under this. (But) if you hold property unlawfully, then, you are liable for consequences," he said, adding the people can lawfully hold assets abroad. Taking a jibe at the Opposition, Jaitley said, "When we're taking steps, don't develop cold feet. For the past 11 months, you have been asking what steps are being taken. When I finally took the steps, you walk the talk and support the Bill."
Jaitley said he cannot issue a circular saying, "Whoever goes to Madison Square should not be prosecuted. But I will certainly make sure innocents are not the target." The reference to Madison Square was about Prime Minister Narendra Modi's address to a large gathering of non-resident Indians in the US in September 2014. He added that the Swiss authorities who were initially reluctant to share any information about HSBC accounts, describing them as 'stolen' have agreed to cooperate with the government's efforts to pin down black money holders. On the basis of information provided by the French government about 600 HSBC accounts, the government has filed criminal prosecution against 121 persons, Jaitley said.
The Supreme Court told Bharatiya Janata Party leader Subramanian Swamy on Monday that it would hear him on Tuesday on the issue of black money, when the special investigation team would also file a fresh status report. Swamy, in his plea, had suggested some measures for bringing back black money.
