Budget: Black money laws give unbridled power to agencies, Oppn wary
If the previous NDA regime’s Prevention of Terrorism Act (POTA) became an instrument of misuse and human rights violations by the authorities, new laws outlined in the budget to fight black money threaten to put similar unbridled powers in the hands of enforcement agencies.business Updated: Mar 01, 2015 00:56 IST
If the previous NDA regime’s Prevention of Terrorism Act (POTA) became an instrument of misuse and human rights violations by the authorities, new laws outlined in the budget to fight black money threaten to put similar unbridled powers in the hands of enforcement agencies.
Concealment of income and assets and evasion of tax in relation to foreign assets will be prosecutable with punishment of rigorous imprisonment (RI) up to 10 years, and offenders will not be permitted to approach the Settlement Commission; those caught concealing income and assets will be penalised at 300% of the tax due. And not filing returns or inadequately disclosing foreign assets in those returns could result in seven years’ RI.
The measures evoked a strong response from industrialists and Opposition alike.
“The black money law is draconian with imprisonment even for minor transgressions, and it will be a source of harassment. It will also turn out to be ineffective in the absence of sophisticated information gathering systems,” said Mohandas Pai, former finance head of Infosys.
Manish Tewari, senior Congress leader and Supreme Court lawyer who deals in tax matters, said, “It’s simply the re-introduction of FERA. It is, in fact, far more draconian than FERA. It is going to put a huge amount of power in the hands of the Enforcement Directorate, which is really not known for its outstanding probity. But the fundamental question is: If you are sincere in your intention to unearth black money, why this distinction between black money stashed abroad and in India?”
Jaitley announced another proposed law — the Benami Transactions (Prohibition) Bill — to fight black money at home. The bill will be introduced this Parliament session.
“This law will enable confiscation of benami property and provide for prosecution, thus, blocking a major avenue for generation and holding of black money in the form of benami property, especially in real estate,” he said.
Changes in income tax laws will be made so that, effective June 1, all transactions such as loans or deposits or advances for transfer of immovable property are done through an account payee cheque or account payee bank draft or by electronic clearing system through a bank account, if the amount of the loan or deposit is Rs 20,000 or higher.
Jaitley also raised the outlay for the special investigation team (SIT) on black money by nearly 10% to Rs 45.39 crore to help expand its infrastructure and logistics procurement capabilities.