New black money law creating panic, confusion: Assocham

Assocham asked the government to hold wider consultations and bring necessary changes to the legislation

The new black money law is creating panic and confusion among taxpayers, industry body Assocham said today, while asking the government to hold wider consultations and bring necessary changes to this legislation.

"Based on a wide range of consultations with a cross section of the taxpayers, we found that there is so much of confusion and in some cases, even panic, for being on the wrong side of this law by non-compliance which may result from inadvertent steps," it added.

It said while the Finance Ministry has launched an exercise of educating on the law through interactive sessions, it has not been able to create the kind of comfort level.

"There is a feeling that immediately after the compliance window comes to an end after September, the tax personnel could be on the prowl. This is certainly not giving stress free business environment," the chamber stated.

Assocham Secretary General D S Rawat said, "There is so much of interface between Indian business persons, professionals, travellers and non-resident Indians with the rest of the world that one could be caught on the wrong side of the law by some silly mistakes on the part of the taxpayers.

"There is no assurance that the tax authorities would not take a serious view of this silly mistake and not launch a criminal proceeding. That is really worrying. If need be, let there be amendments in the law based on more consultations".

The chamber said while the Supreme Court-appointed SIT has to be respected and the menace of black money must be eradicated, the ordinary business transactions should not become difficult to administer.

"We have situations of exporters' remittances involving a very complicated route with currency issues, customs and drawback. Besides, the exporting firms need to create infrastructure abroad which require creating assets overseas.

It could so happen that for small and medium scale exporters, hiring experts in compliance may not be possible and feasible. That situation should not be allowed to become a taxman's delight".

A similar situation may arise for the NRIs who own properties both abroad and in their home country as those not well-educated may find themselves trapped in a gullible and innocent manner, the chamber said.

It stressed that the rules of the law must clearly spell out that honest tax payers and business persons should not be disturbed and not every foreign transaction should be suspected.