 "Arun Jaitley")
Asking people to come clean on unaccounted wealth and live with “heads held high”, Finance Minister Arun Jaitley on Saturday said the government was aware of sectors generating black money but it would be unpleasant to start the “big brother watching” process.
The government, he said, has to trust its citizen and hence keeping a watch on their transactions was not a preferred option. Asserting that those who earn must pay taxes, Jaitley said in future non-payment would be detected. “Everybody, including the tax department, is aware of the sectors in which unaccounted money is generated. It would be a very unpleasant duty for any State to start the process of big brother watching,” he said at an interaction with trade bodies, chartered accountants and income tax officers.
“I do hope it is an opportunity for taxpayers to come out clean, sleep well and live with their heads held high,” he said. The idea behind the Income Disclosure Scheme (IDS) is to nudge India into becoming more compliant state, he added. The ongoing IDS provides for an opportunity to all the persons who have not paid full taxes in the past to declare the undisclosed income and pay surcharge and penalty. The scheme is open till September 30.
Those declaring their unaccounted wealth under IDS will have to pay 25 per cent of tax and penalty on income declared by November, another 25 per cent by March 2017, and the remaining by September 2017.
Jaitley said technological advancements have made it difficult to hide black money and transfer unaccounted funds to offshore accounts. “In future, it will be difficult to go scot-free. Through global deals we are creating a consensus among G-20 countries for information sharing,” he said.
Through various global treaties, India is in a position to get information on real-time on remittances. “As a result of the FATCA agreement signed with the US will be of use for us… The myth that once money crosses the borders it is not traceable has now globally been broken,” he said, pointing to disclosures by HSBC as well as the leak of Panama Papers, that revealed how some people diverted funds without paying taxes.
On economy, Jaitley said more sectors were moving towards organised business. “We already have a large number of sectors of the economy which are slowly moving in that direction. The film industry is moving in that direction, real estate is getting more and more structured and organised,” he said. “But there are also sectors which are not moving in that direction. However, technology is gradually going to make evasion a lot more difficult.”
The government, he said, has to trust its citizen and hence keeping a watch on their transactions was not a preferred option. Asserting that those who earn must pay taxes, Jaitley said in future non-payment would be detected. “Everybody, including the tax department, is aware of the sectors in which unaccounted money is generated. It would be a very unpleasant duty for any State to start the process of big brother watching,” he said at an interaction with trade bodies, chartered accountants and income tax officers.
“I do hope it is an opportunity for taxpayers to come out clean, sleep well and live with their heads held high,” he said. The idea behind the Income Disclosure Scheme (IDS) is to nudge India into becoming more compliant state, he added. The ongoing IDS provides for an opportunity to all the persons who have not paid full taxes in the past to declare the undisclosed income and pay surcharge and penalty. The scheme is open till September 30.
Those declaring their unaccounted wealth under IDS will have to pay 25 per cent of tax and penalty on income declared by November, another 25 per cent by March 2017, and the remaining by September 2017.
Jaitley said technological advancements have made it difficult to hide black money and transfer unaccounted funds to offshore accounts. “In future, it will be difficult to go scot-free. Through global deals we are creating a consensus among G-20 countries for information sharing,” he said.
Through various global treaties, India is in a position to get information on real-time on remittances. “As a result of the FATCA agreement signed with the US will be of use for us… The myth that once money crosses the borders it is not traceable has now globally been broken,” he said, pointing to disclosures by HSBC as well as the leak of Panama Papers, that revealed how some people diverted funds without paying taxes.
On economy, Jaitley said more sectors were moving towards organised business. “We already have a large number of sectors of the economy which are slowly moving in that direction. The film industry is moving in that direction, real estate is getting more and more structured and organised,” he said. “But there are also sectors which are not moving in that direction. However, technology is gradually going to make evasion a lot more difficult.”
