More clarifications on black money Act likely soon

Information under Act will be confidential, says revenue secretary

Revenue secretary Shaktikanta Das said his department was likely to issue a second set of clarifications on the new black money Act, after a number of queries by various quarters.

He also assured industry that information received under the law or disclosures made during the 'compliance window' would be kept confidential. This was after some industrialists, including Rahul Bajaj, raised a concern that information got under the law could be used by officials to harass the assessee concerned.

At a PHDCCI event here, he said: "The government is open to issuing a further circular, to give clarifications and reduce hardships."

The ministry has released 32 'frequently asked questions' (FAQs) on the new law, compliance window and penalties. There is a 120 per cent penalty, plus taxes, and a jail term, for undeclared wealth or assets abroad after the three-month compliance window ends.

During this period, penalty and taxes combined will be 60 per cent of the value of assets declared, with no jail term, and immunity from certain laws. The window closes in end-September and has so far seem only a single disclosure of undisclosed money abroad, of Rs 70-80 crore.

In a different context, on the revealing of names of nearly 1,200 Indian account holders in Swiss banks, veteran banker Deepak Parekh had on Tuesday said the government should distinguish between legitimate and illicit funds before taking any action.

While the government agrees that the black money law should not be used to harass the assessees who make a declaration, and that the information disclosed should be kept confidential, it wants the law to be harsh. In his Independence Day speech, the Prime Minister Narendra Modi had said, "People complain that we have passed a stringent law,

that officers would harass them…doctors also warn us about the side effects of injections. Similarly, this disease is so serious that if we want a treatment, we will have to also bear the side effects…while bearing the side effects, we are moving forward against black money."

Das reiterated on Friday, saying the problem of black money was not a soft one. Hence, it had to be a stringent law.

The revenue secretary criticised tax amnesty schemes, saying these go against honest payers. The finance ministry has refused to call the compliance window an amnesty scheme, as there is no penalty under any such. He said the earlier experience of the Voluntary Disclosure of Income Scheme, in 1997, had shown there was a dip in tax collections for a couple of years after such a scheme comes into operation.