ALSO READ75% penalty, surcharge on undisclosed income, new black money scheme launched (Roundup) 75% penalty, surcharge on undisclosed income, new black money scheme launched 60% penalty on undisclosed income, new black money scheme launched Government aware of black money sources, says Jaitley Finmin warns tax officials on resolution against revenue dept
The government today proposed to raise penalty under Income Tax Act for search and seizure cases by 3-fold to 30 per cent, a move aimed at deterring black money holders from misusing the provisions for turning their unaccounted cash into white. The Taxation Laws (Second Amendment) Bill, 2016, which was tabled by Finance Minister Arun Jaitley in Parliament today, proposes to increase the penalty from 10 per cent to 30 per cent in case the unaccounted income is admitted by the assessee during the search and seizure operation. "This deterrent was necessary," Revenue Secretary Hasmukh Adhia said, adding that people were not scared of paying 10 per cent penalty by admitting black income during the search and seizure operation. The amendments also seek to do away another provision of 20 per cent penalty which was levied in case the assessee did not admit to holding unaccounted wealth at the time of search operations, but paid taxes and showed it in ITR later. Once the amendments are approved by Parliament, there would be a penalty of 30 per cent of unaccounted income, if admitted and taxes are paid. This would take the total incidence of tax and penalty to 60 per cent. While proposing to amend Section 271AAB, the government has decided to retain the provision of levying penalty of 60 per cent of income in "any other cases".
That would raise the incidence of tax and penalty to 90 per cent. During 2015-16, the I-T Department conducted 445 searches which discovered undisclosed income of Rs 11,066 crore. Total assets seized were Rs 712.68 crore. Also 545 searches conducted in 2014-15 have led to admission of undisclosed income worth Rs 10,288 crore. Total assets seized amounted to Rs 761.70 crore. Besides, 569 searches in 2013-14 saw admission of undisclosed income of Rs 10,791.63 crore and asset seizure of Rs 807.84 crore. This took the total undisclosed income which was admitted during searches to Rs 32,146 crore. Search and seizure operations are conducted by tax department when the Assessing Officer believes that the assessee is unlikely to produce books of accounts or likely to suppress books of account and other documents which may be useful and relevant to an income tax proceedings.