Granting Immunity

VDIS-97 gives immunity to those who use it against prosecution under the IT Act, 1961, Wealth Tax Act 1957, Foreign Exchange Act, 1973 and Companies Act, 1956.

That despite so many enactments a large number of persons are evading tax is evident from the fact that only about 12 million persons in the country show income above Rs 12 lakh. So, the government has a legitimate desire to bring a substantial number of evaders under the tax net and to unearth black money to the extent possible. There is no reliable estimate on the quantum of black money. Estimates vary between Rs 80,000 crore and Rs 3,00,000 crore of black money accumulation by 1990. In 1997, the sum could be much larger.

In all, there have been five amnesty schemes since Independence. The first was introuduced in 1951, two were introduced in 1965, one each in 1975 and 1985. The amount realised from 1951 to 1965 did not exceed Rs 61 crore. In 1975, Rs 241 crore was realised as income tax and Rs 8 crore as wealth tax. It is to be underlined here that 1975 was the year of the Emergency and fear was responsible for some collection through the scheme. But the scheme by itself cannot be rated as a success. In 1985, the amount realised of Rs 459 crore was just equal to 3.8 per cent of the tax collection that year.

Periodic declaration of amnesty schemes will only convince the evaders that there will be another, more attractive scheme in the coming years. And statements like, no stringent action after the expiry of the scheme, will only reassure them