A Bill proposing to prosecute those stashing illicit wealth abroad with 10 year rigorous imprisonment and providing for a window to persons seeking to come clean on such undisclosed assets, was introduced in Lok Sabha on Friday.
Finance Minister Arun Jaitley introduced ‘The Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015,’ proposing that it would come into effect from April 1, 2016.
“Recognizing the limitations of the existing legislation, it is proposed to introduce a new legislation to deal with undisclosed assets and income stashed away abroad,” said the Statement on Objects and Reasons of the Bill.
The Bill provides for criminal liability with enhanced punishment with 3-10 year imprisonment for willful attempt to evade tax in relation to foreign income, along with a fine.
Second and subsequent offence would be punishable with rigorous imprisonment for a term of 3-10 years with a fine of Rs 25 lakh to Rs 1 crore.
“In prosecution proceedings, the wilful nature of the default shall be presumed and it shall be for the accused to prove the absence of the guilty state of mind,” it added.
The Bill also provides for a penalty of three times the amount of tax for concealment of income in relation to a foreign asset.
Further, a penalty of Rs 10 lakh would be levied for failure to furnish return of income by persons holding foreign asset, failure to disclose foreign asset in the returns or furnishing of inaccurate particulars of such asset.
The Bill proposes a limited window to persons who have any undisclosed foreign assets who wish to come clean.
“Such persons may file a declaration before the specified tax authority within a specified period, followed by payment of tax at the rate of 30 per cent and an equal amount by way of penalty,” it said.
“It is merely an opportunity for persons to become tax compliant before the stringent provisions of the new legislation come into force,” the statement said.