A bill on unearthing black money and punishing those with ill-gotten wealth stashed abroad was tabled in the Lok Sabha on Friday, the last day before parliament goes into its scheduled month-long recess.
The Undisclosed Foreign Income and Assets (Imposition of New Tax) Bill, 2015, proposes a short window to overseas income tax assesses to declare their assets, pay tax and a penalty and thus avoid imprisonment.
It provides for a maximum of 10 years' rigorous imprisonment for evading tax on foreign assets.
There will also be a penalty at the rate of 300 percent of taxes on the concealed income and assets.
Under the proposed legislation's provisions, concealing foreign income and assets will be non-compoundable and offenders will not be permitted to approach the Settlement Commission for resolving disputes.
The new legislation will provide that income in relation to any undisclosed foreign asset or undisclosed income from any foreign asset will be taxable at the maximum marginal rate.
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A beneficiary of foreign assets will be mandatorily required to file returns, even if there is no taxable income.
It also seeks to make non-filing of income tax returns or filing returns with inadequate disclosure of foreign assets liable for prosecution with punishment of rigorous imprisonment up to seven years.
The bill will now be taken up for discussion after Lok Sabha resumes sittings next month and could thereafter be referred to the parliamentary standing committee for scrutiny before being taken up for passage.
An Indian Express report last month said that 1,195 Indians were in the list of clients who held accounts in HSBC Bank's Geneva branch from 2006-2007.
Reacting to the report, Finance Minister Arun Jaitley said the government has completed assessment of 350 foreign accounts while tax evasion proceedings have been initiated against 60 account holders.
India has strongly advocated the fast implementation of the automatic exchange of tax information globally, within the time-frame agreed to by the G20 countries, in the backdrop of media reporting names of Indian account holders in HSBC Bank's Swiss branch.
At the G20 Brisbane summit last November, leaders endorsed a new global transparency standard by which more than 90 jurisdictions will begin automatic exchange of tax information, using a common reporting standard by 2017-2018.
India has no official estimates of illegal money stashed away overseas, but the unofficial ones range from $466 billion to $1.4 trillion.
"In its crusade against black money and with a view to having credible deterrence against generation of black money, the government has shifted its focus to successfully prosecuting the offenders in the shortest possible time," the finance ministry said in a statement last month.
"During 2014-15 (up to December 2014), the income tax department had conducted searches in 414 groups and seized undisclosed assets of Rs.582 crore," the statement added.
Undisclosed income of Rs.6,769 crore has been admitted by the taxpayers during such searches.
