No Disclosure Benefit To Those Facing Fera Probe: Fm

Union finance minister P Chidambaram yesterday clarified that voluntary disclosure of income scheme (VDIS) and Section 139 of the Income-Tax Act, that calls for widening of the tax base, were not exclusive and the government was not promoting one at the cost of the other.

Chidambaram emphasised that no unusual benefit would be conferred under VDIS upon persons who were facing enquiries or proceedings or prosecutions under Foreign Exchange Regulation Act (Fera).

In an informal chat with newspersons in between a review meeting with tax officials here, he said the VDIS and Section 139 would run parallel to each other.

 

Efforts spent on VDIS will prompt individuals not under the tax net to disclose their incomes under the Section 139 too, he added.

Stating that there was confusion over the VDIS and Section 71 of the Finance Act that caters to rule of evidence, Chidambaram said Section 71 would not apply under VDIS if summons were already issued or investigation or proceedings had been launched.

One cannot claim immunity in such a case, he said.

We are optimistic about the VDIS and one is motivated to come clean by disclosing their wealth after paying a flat rate of 30 per cent, he said.

Asked if any raids by the I-T department were being contemplated, Chidambaram said, We are not going to disclose our cards now.

Urging people to come clean under this scheme, he said, I repeat what I had said during my budget speech in Parliament that behind the velvet glove there is an iron fist.

Later, a note circulated to the press by the I-T department said the surveys and searches under the I-T Act would continue and the VDIS would in no way interfere with the normal action of the government. He said that chief commissioners of Income-Tax (CCIT) in different regions of the country would be armed with more powers to take independent decisions instead of seeking daily instructions from the central office in Delhi.

I have decided to decentralise and delegate powers so that decision-making is flexible, he said adding they should not look to Delhi for instructions all the time and I hope this would become a pattern for the future.

The finance minister, who was in the city to review the targets of the CCITs in Mumbai, Pune and Aahmedabad, said the commissioners would be given targets and it would be left to them to meet the said targets and maximise revenue.

Chidambaram said the targets were set keeping in mind the budgeted direct tax collections of Rs 45,000 crore, but did not reveal the targets set for the respective regions.