People converting black money into white not to be spared: Govt

Those caught illegally converting money will have to cough up 60% tax plus penalties, says Arun Jaitley

In a stern warning to black money hoarders, the Finance Ministry on Friday said those indulging in money laundering activities and converting their ill-gotten money into white will not be spared as law-enforcement agencies are already chasing such trails.

"Those indulging in or colluding with money laundering or converting black money into white will not be spared," Economic Affairs Secretary Shaktikanta Das said in a tweet.

"Trails being pursued by agencies. Coordinated action underway. Result already visible. Will be more visible in coming days," he added.

The government on November 8 had announced the scrapping of old Rs 500 and 1,000 currency notes as part of measures to curb black money and check terror financing.

The Lok Sabha on November 29 had passed the Taxation Laws (2nd Amendment) Bill, 2016, that seeks to tax money deposited in banks post demonetisation, marking the first legislative business during the two-week-old Winter Session which has been paralysed due to continued protest by the Opposition parties.

The bill proposes to levy a total tax, penalty and surcharge of 50% on the amount deposited post demonetisation while higher taxes and stiffer penalty of up to 85% await those who don't disclose but are caught.

Finance Minister Arun Jaitley had said the bill was brought after it came to the government's notice that some people were trying to illegally exchange the demonetised Rs 1,000 and Rs 500 currency notes.

Jaitley said as per the amendment proposed, those caught illegally converting money will have to cough up 60% tax plus penalties, which will come to 85%.

Those who disclose black money to banks will have to pay 50% tax, including surcharge and penalty. While they will get back 25% immediately, the rest 25% will be returned after 4 years.