Parliament approves black money bill

The black money bill received Parliament's approval with the Rajya Sabha today passing the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Bill, 2015, a day after the Lok Sabha approved the legislation.

The bill will now go to the President to be signed into law.

Earlier on Wednesday, members of Trinamool Congress and the CPM said the term 'black money' is racist and should be changed. Derek O'Brien of the TMC suggested that the term black money should be changed to "dirty money".

Tracing the history of coining the term 'black money' to Europe several centuries ago, he said, money that appeared in black as it was mixed with copper while minting was called as black money.

CPM leader Sitaram Yechury also underscored that the term black money was "racist" and it should be replaced with some other term.

The Undisclosed Foreign Income and Assets (Imposition of New Tax) Bill, 2015 seeks to check black money menace with stringent provisions for those stashing illegal wealth abroad.

The bill prescribes that such income will be taxed under stringent provisions of the new legislation and not under the Income-tax Act.

The government, however, allayed fears that innocent people could be harassed under the proposed "deterrent" law.

Finance minister Arun Jaitley had said earlier that there would be short compliance window for persons having undisclosed income abroad to come clean by paying 30 per cent tax and 30 per cent penalty.

There could be a two-month window to declare overseas assets and within six months one would have to pay tax and penalty, he said.

Once the compliance window closes, anyone found having undeclared overseas wealth would be required to pay 30 per cent tax, 90 per cent (of tax) penalty and face criminal prosecution.

The offence will be non-compoundable and the offenders will not be permitted to approach the Settlement Commission for resolution of disputes. The offender also faces imprisonment of up to 10 years.

The enforcement agencies will be able to attach and confiscate the accounted assets held abroad and launch proceedings.

It also seeks to make non-filing of income tax returns or filing of returns with inadequate disclosure of foreign assets liable for prosecution with punishment of rigorous imprisonment of up to 7 years.

To protect persons holding foreign accounts with minor balances which may not have been reported out of oversight or ignorance, it has been provided that failure to report bank accounts with a maximum balance of up to Rs5 lakh at any time during the year will not entail penalty or prosecution.

The tax liability on an overseas property would be computed on the basis of its current market price, not the price at which it was acquired.

The bill provides for a short window for those holding overseas assets to declare their wealth, pay taxes and penalties to escape punitive action. Failure to furnish return in respect of foreign income or assets shall attract a penalty of Rs10 lakh. The same amount of penalty is prescribed for cases where although the assessee has filed a return of income, but he has not disclosed the foreign income and asset or has furnished inaccurate particulars of the same.