To tackle domestic black money, the government is opening a one-time window for tax evaders to come clean. This compliance window will be open from June 1 to September 30 and past transgressors can come clean by paying tax, surcharge and penalty on the undisclosed amount.
In a bid to have a friendly approach, the tax department has decided to seek taxpayers inputs before coming out with a detailed set of FAQs or frequently asked questions for smooth operation of the compliance window.
It is a first of its kind move, where government wants to know the concerns of those who wish to come clean, a move that will be implemented to sooth frayed nerves of these tax payers.
“The department will first be inviting queries and suggestions from the people on the declarations under the Benami bill and will then later on come out with various sets of FAQs incorporating those suggestions and replies to the concerns raised by the people,” sources said.
“The decision was arrived at after consultations with in the tax department, which highlighted that blackmoney locked up in the country is huge but at the same time making people declare it on their own is equally tough. Thus, to make sure that taxpayers do not get hassled up which might deter them from making disclosures, the government through such a move wants to come across as a tax friendly government,” a senior government official in the know of the matter told HT on the condition of not being named.
Finance minister Arun Jaitley in the Budget 2016 - 17 speech announced this compliance window and said that tax payers can clear up their past transgressions by paying tax at 30%, surcharge at 7.5% and penalty at 7.5%, which adds up to 45% of the undisclosed income.
This will be the second such compliance scheme under the NDA government.
Last year, the government had enacted a similar window for illicit funds stashed overseas with assets in excess of Rs 4,000 crore being disclosed.
In case of the current window, while senior government officials are expecting a good number of disclosures though field officers feel otherwise.
“The government is aware that a lot of black money is in real estate itself. Benami transactions take place even today, and since the registration process is not transparent enough it is tough to crack them down,” field officers said.
According to a FICCI report, about a third of India’s black money transactions are believed to be in real estate, followed by manufacturing, and purchase of jewellery and consumer goods.